We investigate the impact of foreign equity and debt on the occurrence of banking crises in 61 lower-income and middle-income economies during the 1984-2010 period. We also focus on the effects of domestic institutions on banking crises and whether they mitigate or exacerbate the impact of the...

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....