The financial system plays a crucial role in economic development. Financial crises are recurrent phenomena in modern financial systems. The literature offers several definitions of financial instability, but it is well known that a financial crisis with a banking crisis is the most common example of financial instability. In this paper we introduce a novel model for detection and prediction of...

This paper seeks to examine the competitive behavior of the Brazilian banking industry by conducting an analysis at the level of individual banks to gain an understanding of how the risk-taking behaviors of banks are affected by their degree of market power. Our results suggest that the Brazilian banking industry is characterized by monopolistic competition. Our foremost finding is that the mar...

The liquidity crisis in 2008 sparked interest in the role of regulation that could promote resilience and stability in the banking system. While the Public Interest theory suggests that legal policies could discipline banking activities, the Private Interest theory predicts otherwise, which impairs banking performance. The conflicting theories warrant comprehensive research, especially for Isla...

We examine whether by adding a credit channel to the standard New Keynesian model we can account better for the behaviour of US macroeconomic data up to and including the banking crisis. We use the method of indirect inference which evaluates statistically how far a model’s simulated behaviour mimics the behaviour of the data. We …nd that the model with credit dominates the standard model by a ...

During the years 1993-94 Venezuela experienced a severe banking crisis which ended up with a total of 18 commercial banks intervened by the government. Here we develop an early warning model for detecting credit related bankruptcy through discriminant functions developed on financial and macroeconomic data predating the 1993-94 crisis. A robustness test with data from 1996-2004 performed on the...

Recent highly-publicized bank mergers following the home mortgage crisis of 2007-2008, often the result of bank failure or insolvency, brought attention to the issue of consolidation within the banking industry. The banking system has seen increases in consolidation at national levels, with the largest banks gaining increasingly greater proportions of market share. This merger activity and the ...

Nowadays, the widespread connections among national and international organizations and industries make crisis in one area distress other organizations. One of the sensitive industries is banking industry, which has faced fundamental changes due to the various economic and political crisis in the last decade. Alterations such as exchange rates fluctuations, bankruptcy of unorganized institution...

systemic risk is the risk of collapse in the financial system. due to the financial crisis that hit the world economy in 2008, the study of systemic risk in the banking sector became more attractive for researchers. in this research we study systemic risk in the iranian banking sector by using a famous systemic risk measure, the ∆covar. to compute the measure, we employ dynamic conditional corr...

In a post-crisis scenario, the global economy has entered into an episode of gradual recovery characterized, in part, by different growth velocities and capital flows to emerging market economies. This global environment has opened a debate relative to macroprudential regulation, financial stability and capital flows. In this paper I highlight the importance of this latest aspect, particularly ...

We calculate abnormal stock returns for Japanese non-financial companies around major events associated with the banking crisis (1995–2000), and find that not all companies were equally sensitive to the malaise of the banking sector: the most affected were small, leveraged, low-tech companies with low credit ratings and low market to book ratios. This is consistent with ‘‘credit crunch’’ theori...