IMF Lending and Banking Crises

By Luca Papi, Andrea F Presbitero, Alberto Zazzaro

January 26, 2015

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Luca Papi, Andrea F Presbitero, and Alberto Zazzaro. IMF Lending and Banking Crises, (USA: International Monetary Fund, 2015) accessed December 26, 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

This paper looks at the effects of International Monetary Fund (IMF) lending programs on banking crises in a large sample of developing countries, over the period 1970-2010. The endogeneity of the IMF intervention is addressed by adopting an instrumental variable strategy and a propensity score matching estimator. Controlling for the standard determinants of banking crises, our results indicate that countries participating in IMF-supported lending programs are significantly less likely to experience a future banking crisis than nonborrowing countries. We also provide evidence suggesting that compliance with conditionality and loan size matter.

Subject: Banking crises, Currency crises, Financial crises, Financial institutions, Loans, Systemic crises

Keywords: Banking crises, Banking crisis, Conditionality, Currency crises, Global, IMF activity, IMF arrangement, IMF emergency liquidity provision, IMF intervention, IMF loan agreement, IMF presence, IMF program, IMF programs, IMF rescue package, IMF support, Lending arrangement, Liquidity provision, Loans, Political economy, Systemic crises, WP

Publication Details

Pages:

56
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/019
Stock No:

WPIEA2015019
ISBN:

9781484308691
ISSN:

1018-5941

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