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Assessing the Robustness of the Relationship Between Financial Reforms and Banking Crises

Pablo Gluzmann (CEDLAS-FCE-UNLP and CONICET) Martin Guzman (Columbia University) - Working Paper #294

Martin Guzman, Pablo Gluzmann

Paper  975kb pdf

This paper provides a novel approach for assessing the robustness of the relationship between dierent types of nancial reforms and banking crises for the period 1973-2005. We document the following facts for emerging economies: (i) liberalizations of capital accounts, securities markets, interest rates, removal of credit controls, barriers to entry, and reduction of state ownership in the banking sector, all are positively associated with a higher frequency of banking crises; (ii) the increase in nancial turbulence is mainly concentrated within a time-window of ve years after the reforms: If a country does not experience a banking crisis within that period, the probability of experiencing a crisis afterwards becomes insignicant; and (iii) the results are robust to the inclusion of all control variables that have been found in the literature as signicant determinants of banking crises.

About the Authors

Martin Guzman
Associate Research Scholar
Graduate School of Business
Columbia University

Martin Guzman is a Associate Research Fellow at Columbia University Graduate School of Business and an Associate Professor at Universidad de Buenos Aires.

He is a co-chair of Columbia University Initiative for Policy Dialogue's Taskforce on Debt Restructuring and Sovereign Bankruptcy, and a member of the INET Research Group on "Macroeconomic Externalities” chaired by Professor Joseph Stiglitz. He is also a Senior Fellow in CIGI’s Global Economy Program. He is an Editor of the Journal of Globalization and Development.

He holds a PhD in Economics from Brown University. His research fields are Macroeconomics and Economic Development.

Pablo Gluzmann

Pablo Gluzmann is an Assistant Professor at University of La Plata, a Research Fellow at the Consejo Nacional de Investgaciones Científicas y Técnicas (CONICET), and a Senior Fellow at the Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS-FCE-UNLP).

He has published several papers in academic journals as the Journal of Development Economics, Economic Letters, Journal of Income Distribution, World Development, Stata Journal and Económica, as well as several chapters in different books.

He holds a PhD in Economics from University of La Plata.

Publication Information

Type Working Paper
Program -
Posted 10/02/15
Download 975kb pdf
# Pages 48