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, the results indicate that countries participating in IMF-supported lending programs are significantly less likely to experience a future banking crisis than nonborrowing countries. The paper also provides evidence suggesting that compliance with conditionality and loan size matter, corroborating the importance of IMF-supported reform and liquidity provision for banking sector stability.

IMF lending and banking crises / Papi, Luca; Presbitero, Andrea Filippo; Zazzaro, Alberto. - In: IMF ECONOMIC REVIEW. - ISSN 2041-4161. - ELETTRONICO. - 63:3(2015), pp. 644-691.

IMF lending and banking crises

PAPI, LUCA;PRESBITERO, Andrea Filippo;ZAZZARO, Alberto
2015-01-01

Abstract

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, the results indicate that countries participating in IMF-supported lending programs are significantly less likely to experience a future banking crisis than nonborrowing countries. The paper also provides evidence suggesting that compliance with conditionality and loan size matter, corroborating the importance of IMF-supported reform and liquidity provision for banking sector stability.
2015
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11566/225036
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