The programs of the International Monetary Fund were originally designed to provide short-term assistance to countries implementing policies to address balance of payments disequilibria. In recent decades, however, the Fund has instituted new facilities with longer time horizons, while many...

This paper investigates Alan Greenspan's claim that capital markets can serve as a financial “spare tire” in the event of a banking crisis. We test the impact of stock market capitalization and activity on the output losses of 76 banking crises in 66 countries over the period of 1975-2008....