Spain - DNA of a financial crisis


Back in July 2000 following the Asian crises, the IMF produced a report entitled "Currency and Banking Crises: The Early Warnings of Distress". The study looked at 102 financial episodes in 20 countries.

The IMF went back to the drawing board again in the November 2008 treatise “Systemic Banking Crises: A new database”.  In this paper, the IMF examined all systemically important banking collapses for the period 1970-2007. There were 42 in total covering 37 countries. According to the IMF, although there will always be exceptions, financial crises do tend to have a typical DNA. The IMF’s statistics provide some interesting data. Prior to a financial crisis starting, the average fiscal balance is a deficit of 2.1% of GDP and the current account typically tends to be in deficit to tune of 3...

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