Market Phoenixes and Banking Ducks Are Recoveries Faster in Market-Based Financial Systems?

September 1, 2011

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Format: Chicago

Julien Allard, and Rodolphe Blavy. Market Phoenixes and Banking Ducks Are Recoveries Faster in Market-Based Financial Systems?, (USA: International Monetary Fund, 2011) accessed December 4, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Recoveries vary considerably across countries: our paper compares recoveries in bank-based and market-based economies and finds that market-based economies experience significantly and durably stronger rebounds than the bank-based ones (in particular the more bank-based economies of continental Europe). Further, stronger recoveries also tend to be associated with broader economic flexibility. Our findings suggest that dealing with bank sector vulnerabilities is paramount to support the recovery. In the medium term, structural policies to deepen financial markets are useful, but need to be complemented with structural measures to address rigidities more broadly in the real economy.

Subject: Bank credit, Business cycles, Economic growth, Economic recovery, Economic sectors, Financial crises, Financial sector, National accounts

Keywords: Bank, Bank-based economy, Banking sector, Business cycles, Economic crises, Economic recovery, Economies matter, Economy, Financial intermediation, Financial sector, Financial system structure, Global, Goods market regulation, Market financing, Market phoenix, Market-based economy, Private sector, Product market, Recession amplitude, Recoveries, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/213
Stock No:

WPIEA2011213
ISBN:

9781463902292
ISSN:

1018-5941

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