Banking and balance of payments crises: On possible causes of the twin crises

Arbeitspapier

Banking and balance of payments crises often happen quite simultaneously. We show that the impact of an expected devaluation on the net worth of commercial banks with a short open foreign exchange position speeds up the timing of a balance of payments crisis. We employ an asymmetric information framework in which domestic commercial banks have to pay a positive risk premium on the international capital market which is determined by their net worth. Some stylized facts from selected transition and developing countries are presented in order to gauge the empirical relevance of the effects that we stress.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Year: 1998 ; Kiel: Institut für Weltwirtschaft (IfW)

Classification and Topics

• Classification: Wirtschaft ; Foreign Exchange ; Financial Aspects of Economic Integration
• Subject: Bankenkrise ; Währungskrise ; Monetäre Wechselkurstheorie ; Bank ; Auslandsverschuldung ; Asymmetrische Information ; Risikoprämie ; Devisenspekulation ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Buch, Claudia M. ; Heinrich, Ralph P.
• Event: Veröffentlichung
• (who): Kiel Institute of World Economics (IfW) ; ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel
• (when): 1998

Further information

• Handle: http://hdl.handle.net/10419/47107
• Last update: 10.03.2025, 11:44 AM CET