Predicting systematic banking crisis in selected developed countries by multiple logit method
Subject Areas : Bi-quarterly Journal of development economics and planning
Mohammad Reza Asgarian
1
,
Saeed Daei Karimzadeh
2
,
Hossein Sharifi Renani
3
1 - PhD student in Economics, Islamic Azad University, Isfahan Branch (Khorasgan), Isfahan, Iran
2 - Associate Professor, Department of Economics, Islamic Azad University, Isfahan Branch (Khorasgan), Isfahan, Iran
3 - Associate Professor, Department of Economics, Islamic Azad University, Isfahan Branch (Khorasgan), Isfahan, Iran
Keywords: Early Warning System, Banking Crisis, Bank Attack, Systematic Crisis, Multiple Logit Model,
Abstract :
In this paper, in order to deal with systematic banking crises that lead to turmoil in various economic sectors, using the multiple logit method, the factors affecting the probability of banking crises in 27 selected developed countries during the period 1994-2018 were predicted. The results indicate the positive effect of inflation rate variables in the pre- and post-crisis period and the positive effect of the percentage of real interest rate changes in the post-crisis period on the probability of banking crisis. Economic growth rate and per capita production had a positive effect on the likelihood of a banking crisis in the pre-crisis period, but given the negative effect of these two variables in the post-crisis period, Granting bank loans to the private sector in the pre-crisis period had a negative effect on the likelihood of a banking crisis and doing it in the post-crisis period had a positive effect on it.
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