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"This volume presents two recent analyses, prompted by the recent East Asian crisis, of government responses to financial crises. It evaluates the tradeoffs involved in public policies for systemic financial and corporate sector restructuring. This book also draws on cross-country evidence to help determine whether specific crisis containment and resolution policies effect the fiscal costs of resolving a crisis. A comprehensive database, of 113 systemic banking crises that have occurred in 93 countries since the 1970s, is included. Also incorporated in this database is information on 50 borderline nonsystemic banking crises in 44 countries during that same period of time."
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W O R L D B A N K D I S C U S S I O N PA P E R N O . 4 2 8
Managing the Real and Fiscal Effects of Banking Crises
Edited by Daniela Klingebiel Luc Laeven The World Bank Washington, D.C.
Copyright © 2002 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing January 2002 1 2 3 4 04 03 02 Discussion Papers present results of country analysis or research that are circulated to encourage discussion and comment within the development community. The typescript of this paper therefore has not been prepared in accordance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. The World Bank encourages dissemination of its work and will normally grant permission promptly. Permission to photocopy items for internal or personal use, for the internal or personal use of specific clients, or for educational classroom use, is granted by the World Bank, provided that the appropriate fee is paid directly to Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, U.S.A., telephone 978-750-8400, fax 978-750-4470. Please contact the Copyright Clearance Center before photocopying items. For permission to reprint individual articles or chapters, please fax your request with complete information to the Republication Department, Copyright Clearance Center, fax 978-750-4470. All other queries on rights and licenses should be addressed to the World Bank at the address above or faxed to 202-522-2422. ISBN: 0-8213-5056-0 ISSN: 0259-210X Daniela Klingebiel is a Senior Financial Economist at the World Bank. Luc Laeven is a Financial Economist at the World Bank Cover photo: Bank Polanska Kasa Opieki SA Library of Congress Cataloging-in-Publication Data has been applied for.
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Contents Foreword
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Abstract
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Financial Restructuring in Banking and Corporate Sector Crises: Which Policies to Pursue? Stijn Claessens, Daniela Klingebiel, and Luc Laeven
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Controlling the Fiscal Costs of Banking Crises Patrick Honohan and Daniela Klingebiel
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Episodes of Systemic and Borderline Banking Crises Gerard Caprio and Daniela Klingebiel
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