Dollarization of liabilities (DL) has emerged as a key factor in explaining the vulnerability of emerging markets to financial and currency crises. The quot;usual suspectsquot; of causing DL include fatalistic determinants such as a long history of unsound macroeconomic policies, financial...

This study examines how depositors choose among different banks and over time in Colombia, focusing on whether they discipline bank behavior. By controlling for a more comprehensive set of risk/return factors, the study improves upon conventional market discipline tests. Panel data estimations...

The purpose of this study is to analyze bank behavior in Chile over time, looking at how their balance sheets and performance move both in the short and long run, and how they react to macroeconomic shocks. The evolution of banking aggregates over an 18 year period (1989-2006), using quarterly...

Latin American countries have experienced serious slowdowns in credit growth since the early 1990s, and have also adopted the Basel Accord risk-weighted minimum capital requirements during this period. Drawing from a unique data set comprising 2,893 banks and 152 countries over the period 1987...

The simple answer to both questions in the title of this paper is: No. We concentrate on the three main risk elements that contributed to the banking system's difficulties during the crisis: increasing dollarization of the balance sheet, expanding exposure to the government, and, eventually, the...

This paper examines the determinants of the high intermediation spread observed in the Colombian banking sector for over two decades. A reduced-form equation is estimated on the basis of a bank profit maximization model that permits a decomposition into operational costs, financial taxation,...

Drawing from a unique data set comprising 2,893 banks and 152 countries over the period 1987 to 2000, we test whether the adoption of the Basel Accord by Latin American and Caribbean countries was responsible for the serious slowdowns in credit growth experienced by these countries. We find...

We develop a semi-structural new-Keynesian open-economy model, with separate food and non-food inflation dynamics, for forecasting and monetary policy analysis in low-income countries and apply it to Kenya. We use the model to run several policy-relevant exercises. First, we filter international...

We extend the framework in Andrle and others (2013) to incorporate an explicit role for money targets and target misses in the analysis of monetary policy in low-income countries (LICs), with an application to Kenya. We provide a general specification that can nest various types of money...