By Glenn Hoggarth, Ricardo Reis and Victoria Saporta
Over the past quarter of a century, unlike the preceding 25 years, there have been many banking crises around the world. Although there is now a substantial empirical literature on the causes of such crises, there have been fewer studies measuring their potential costs. Yet it is a desire to avoid such costs that lies behind policies designed to prevent, or manage, crises.
Costs of banking system instability: some empirical evidence