Microeconomic Implications Of Remittances In An Overlapping Generations Model
Source: International Monetary Fund
The paper provides an empirical analysis of aggregate banking system ratios during systemic banking crises. Drawing upon a wide cross-country dataset, the authors utilize parametric and nonparametric tests to assess the power of these ratios to discriminate between sound and unsound banking systems. They also estimate a duration model to investigate whether the ratios help determine the timing of a banking crisis. Despite some weaknesses in the available data, the findings offer initial evidence that some indicators are precursors for the likelihood and timing of systemic banking problems. Nevertheless, they caution against sole reliance on these indicators and advocate supplementing them with other tools and techniques.