Title IMF Lending and Banking Crises / prepared by Luca Papi, Andrea F. Presbitero, and Alberto Zazzaro

Published [Washington, D.C.] : International Monetary Fund, ©2015

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Description 1 online resource (56 pages) : illustrations (some color) Series IMF working paper ; WP/15/19 IMF working paper ; WP/15/19. Contents Cover; Contents; 1. Introduction; List of figures; 1. Banking Crises and IMF Lending Arrangements; 2. Related literature; 2.1 IMF Support and Banking Crises: The Channels of Influence; 2.1.1 Credit Availability; 2.1.2 Conditionalities and Financial Reforms; 2.1.3 Bad Signals and Moral Hazard; 2.2 IMF Support and Financial Crises; 3 Data and Stylized Facts; 4 The Empirical Strategy; 4.1 The Empirical Model; 4.2 The Identification Strategy; 4.3 The IV Approach; 5 Results; 5.1 Main Findings; 2. IMF Lending Arrangements and Foreign Policy Similarity; 5.2 The Credit Channel 3. Coefficient on IMF ARRANGEMENT below and above loan size thresholds5.3 The Reform Channel; 5.3.1 Compliance with Conditionality; 5.3.2 World Bank Lending; 6 Robustness Checks and Extensions; 6.1 Past Crises, IMF Arrangements, and Future Banking Crises; 6.2 Other Potential Triggers of Banking Crises; 6.3 The Role of Policies and Institutions; 6.4 Instruments and Sub-samples; 6.5 Propensity Score Matching Results; 6.6 Alternative Lag Structures; 7 Conclusions; List of tables; 1. Determinants of Banking Crises: Selected Review; 2. Variables: Definitions, Sources and Summary Statistics 3. IMF lending Arrangements and Banking Crises4. Baseline Regressions; 5. The Credit Channel; 6. The Reform Channel; 7. IMF Programs which do not Follow Financial Crises; 8. Additional Control Variables; 9. Sample Splits According to the Institutional Setting; 10. The US AID Instruments and Sub-samples; 11. Propensity Score Matching; 12. Different Lag Structure; 8 Appendix 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.--Abstract Notes "January 2015." "Research Department." Bibliography Includes bibliographical references (pages 31-38) Notes Online resource; title from pdf title page (IMF.org Web site, viewed January 29, 2015) Subject International Monetary Fund -- Developing countries SUBJECT International Monetary Fund fast Subject Economic assistance -- Developing countries Financial crises -- Developing countries -- Prevention Conditionality (International relations) -- Developing countries Conditionality (International relations) Economic assistance Financial crises -- Prevention Developing countries Form Electronic book Author Presbitero, Andrea F., author Zazzaro, Alberto, author International Monetary Fund. Research Department.

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