Excess Credit and the South Korean Crisis

Demetriades, Panicos; Fattouh, Bassam

doi:10.1057/9780230594012_4

Cited by 4 publications

(1 citation statement)

References 22 publications

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“…This definition is, hence, focused on institutional aspects of the functioning of markets, including regulatory issues and the clearing and settlement.22 The authors find this result for a large panel with banking data for a number of countries 23. Unproductive credit was common in several Asian countries before the 1997 crisis (seeDemetriades and Fattouh, 2000), while non-performing loans were one of the main constraints for growth in transition countries.…”

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confidence: 99%

Latin American Financial Development in Perspective

Garcı́a-Herrero¹,

Santillán²,

Gallego³

et al. 2019

Regional Integration in Europe and Latin America

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This paper assesses financial sector development in Latin America, both in the banking system and in the capital markets. After a brief review of the explanatory factors and the definitions of financial development found in the literature, Latin American countries are classified in groups of similar characteristics by using cluster analysis-first worldwide and second within the region-in terms of financial depth and per capita income. In the worldwide exercise, virtually all Latin American countries appear in the same cluster, which argues in favor of a regional dimension in financial development. A comparison of the Asian and Eastern European emerging regions shows that Latin America lags behind Asia in terms of financial development and compares slightly unfavorably with Eastern Europe. In the regional cluster exercise, four relatively homogeneous groups of Latin American countries are found. Stylized facts of the four groups' banking sectors and capital markets show-in line with the results of the more recent economic literature-that those countries which have deeper financial systems are also those with a more efficient financial system. Although no conclusions on causality can be drawn from this review, it argues in favor of a virtuous circle, in terms of financial depth and efficiency, for countries with the most appropriate structure of the financial system.

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confidence: 99%

Latin American Financial Development in Perspective

Garcı́a-Herrero¹,

Santillán²,

Gallego³

et al. 2019

Regional Integration in Europe and Latin America

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Financial Institutions, Contagious Risks, and Financial Crises

Huang

2002

SSRN Journal

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In this paper contagious risks and financial crises are endogenized through the interactions among corporations, banks, and the interbank market. We show that the lack of financial discipline in a single-bank-financing economy generates informational problems and thus the malfunction of the interbank market, which constitutes a mechanism of financial contagion and may lead to a financial crisis. In contrast, financial discipline in an economy with diversified financial institutions leads to timely information disclosure from firms to banks and improves the informational environment of the interbank market. With symmetric information in the interbank market, bank runs are contained to insolvent banks and financial crises are prevented. Our theory sheds light on the causes and timing of the East Asian crisis; it also has important policy implications for the lender of last resort and banking reform.

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Financial Policies and the Aggregate Productivity of the Capital Stock: Evidence from Developed and Developing Economies

2003

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Excess Credit and the South Korean Crisis

Cited by 4 publications

References 22 publications

Latin American Financial Development in Perspective

Latin American Financial Development in Perspective

Financial Institutions, Contagious Risks, and Financial Crises

Financial Policies and the Aggregate Productivity of the Capital Stock: Evidence from Developed and Developing Economies

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