Fragile by Design: The Political Origins of Banking Crises and Scarce Credit

This paper provides review for which demonstrates the links between politics and banking. In addition to the perspective in , several recent studies relating to financial crisis are also introduced here. Issues about illiquidity, insolvency, credit boom, accuracy of credit rating, and neglected risk are discussed. Banking system is the bridge connecting households and sectors in the economy, where the design of the banking system has significant influence on the developments of countries.