Banking crises in emerging economies

Description

This paper therefore discusses the factors responsible for banking problems in developing countries and the policy options that are available for reducing the frequency and severity of these crises. The paper does not address the question of financial fragility more generally; in addition, it concentrates on issues of crisis prevention rather than those of crisis management and bank restructuring. Most of the examples are drawn from the experience of the emerging economies rather than from either the transition economies or the low-income developing countries.

The paper is structured as follows. The next section takes up the origin of banking crises in emerging countries, focusing on eight general policy prescriptions that have often been proposed to deal with each of these problems. Examples of recent reforms in some emerging economies are also discussed. Some brief concluding remarks follow in a final section.