Enrica Detragiache

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Based on evidence for 61 countries in 1980-97, this study finds that explicit deposit insurance tends to increase the likelihood of banking crises, the more so where bank interest rates are deregulated and the institutional environment is weak. Also, the adverse impact of deposit insurance on bank stability tends to be stronger the more extensive is the(More)
A theory of the optimal number of banking relationships is developed and tested using matched bank-firm data. According to the theory, relationship banks may be unable to continue funding profitable projects owing to internal problems and a firm may thus have to refinance from non-relationship banks. The latter, however, face an adverse selection problem,(More)
  • CREDIT BOOMS, SUBPRIME MORTGAGE MARKET, +17 authors Calvin Schnure
  • 2008
This paper links the current subprime mortgage crisis to a decline in lending standards associated with the rapid expansion of this market. We show that lending standards declined more in areas that experienced larger credit booms and house price increases. We also find that the underlying market structure mattered, with entry of new, large lenders(More)
We study how foreign bank penetration affects financial sector development in poor countries. A theoretical model shows that when domestic banks are better than foreign banks at monitoring soft information customers, foreign bank entry may hurt these customers and worsen welfare. The model also predicts that credit to the private sector should be lower in(More)
  • Barry Eichengreen, Carlos Arteta, +7 authors Maria Soledad Martinez-Peria
  • 2000
The existing empirical literature on banking crises has not produced agreement on their causes. Using a sample of 75 emerging markets in 1975-1997, we attempt to determine what we know about banking crises by establishing which previous results are robust. Among the robust causes of emerging-market banking crises are rapid domestic credit growth, large bank(More)
The paper studies the empirical relationship between banking crises and financial liberalization in a panel of 53 countries for the period 1980-95. We find that banking crises are more likely to occur in liberalized financial systems. However, the impact of financial liberalization on banking sector fragility is weaker where the institutional environment is(More)
Financial innovation and overconfidence about the risk of new financial products were key factors behind the 2008 U.S. credit crisis. We show that a model with a collateral constraint in which learning about the risk of a new financial environment interacts with Fisherian amplification produces a boom–bust cycle in debt, asset prices and consumption. Early(More)
Using aggregate and bank level data for several countries, the paper studies what happens to the banking system following a banking crisis. Crises are not accompanied by a significant decline in aggregate bank deposits relative to GDP, although depositors leave weaker banks for stronger ones. Credit slows substantially, but the credit-to-GDP ratio is higher(More)
This article explores how a multivariate logit model of the probability of a banking crisis can be used to monitor banking sector fragility. The proposed approach relies on readily available data, and the fragility assessment has a clear interpretation based on insample statistics. The model has better in-sample performance than currently available(More)