implementing efficient allocations in a model of financial intermediation abstract in a finite trader version of the diamond and dybvig j polit econ 91 1983 401 model the ex ante efficient allocation is implementable by a direct mechanism i e each trader announces the type of his own ex post preference in which truthful revelation is the strictly dominant strategy for each trader when the model is modified by formalizing the sequential service constraint cf wallace fed reserve bank minneapolis quart rev 12 1988 3 the truth telling equilibrium implements the symmetric ex ante efficient allocation with respect to iterated elimination of strictly dominated strategies

bank runs and institutions the perils of intervention we study ex post efficient policy responses to a run on the banking system and the ex ante incentives these responses create we show that the efficient response to a run is typically not to freeze all remaining deposits since doing so imposes heavy costs on some individuals instead once a run is underway benevolent government institutions would allow additional deposit withdrawals placing further strain on the banking system when depositors anticipate these extra withdrawals their incentive to participate in the run increases in fact ex post efficient interventions can generate the conditions necessary for a self fulfilling run to occur jel g21 g8

liquidity constraints in a monetary economy this article presents a microfounded model of money with a consumption and an investment market we consider an economy in which only part of the investment returns can be pledged a liquidity constraint arises when the pledgeable part of the returns are not enough to pay for investment costs we show that when the liquidity constraint is binding agents may make a cash downpayment and money can perform two roles as a provider of liquidity services and exchange services the liquidity constraint constitutes a channel though which underinvestment occurs even at low inflation rates

young citizens knowledge and perceptions of bioenergy and future policy implications abstract in the past few years extensive discussions on bioenergy has been both positive and negative in europe the image of bioenergy appears to be low with lack of broad public support previous studies show that younger people are unsure about many issues surrounding renewable energy the aim of this study was to investigate the knowledge and perceptions of bioenergy among pupils in north karelia finland data drawn from 495 ninth grade students indicate that the majority of them lack in depth knowledge about different renewable energy sources including bioenergy only a small percentage has a high level of knowledge about bioenergy and the majority indicates critical perceptions of it statistically significant gender differences are not apparent girls appear to be more knowledgeable than boys results also show a clear urban and rural difference in perceptions of bioenergy perceptions of urban respondents being more positive than that of their rural counterparts developing collaboration between future bioenergy policies and bioenergy education for younger citizens is necessary for their engagement in critical debates on bioenergy

money credit and banking in monetary models where agents are subject to trading shocks there is typically an ex post inefficiency since some agents are holding idle balances while others are cash constrained this problem creates a role for financial intermediaries such as banks who accept nominal deposits and make nominal loans in general financial intermediation improves the allocation the gains in welfare come from the payment of interest on deposits and not from relaxing borrowers liquidity constraints we also demonstrate that when credit rationing occurs increasing the rate of inflation can be welfare improving

imperfect interbank markets and the lender of last resort abstract this paper presents a monetary model in which interbank markets have limited commitment to contracts limited commitment reduces the proportion of assets that can be used as collateral and thus banks with high liquidity demands face borrowing constraints in interbank markets these constraints can be relieved by the central bank a lender of last resort through the provision of liquidity loans i show that the constrained efficient allocation can be decentralized by controlling only the money growth rate if commitment to interbank contracts is not limited otherwise a proper combination of central bank loans and monetary policy is needed to bring the market equilibrium into a state of constrained efficiency

global land use implications of first and second generation biofuel targets recently an active debate has emerged around greenhouse gas emissions due to indirect land use change iluc of expanding agricultural areas dedicated to biofuel production in this paper we provide a detailed analysis of the iluc effect and further address the issues of deforestation irrigation water use and crop price increases due to expanding biofuel acreage we use globiom an economic partial equilibrium model of the global forest agriculture and biomass sectors with a bottom up representation of agricultural and forestry management practices the results indicate that second generation biofuel production fed by wood from sustainably managed existing forests would lead to a negative iluc factor meaning that overall emissions are 27 lower compared to the no biofuel scenario by 2030 the iluc factor of first generation biofuels global expansion is generally positive requiring some 25 years to be paid back by the ghg savings from the substitution of biofuels for conventional fuels second generation biofuels perform better also with respect to the other investigated criteria on the condition that they are not sourced from dedicated plantations directly competing for agricultural land if so then efficient first generation systems are preferable since no clear technology champion for all situations exists we would recommend targeting policy instruments directly at the positive and negative effects of biofuel production rather than at the production itself

the long run relationship between inflation and output in postwar economies abstract we investigate the relationship between inflation and real output in a large sample of postwar economies our methodology is to use a structural vector autoregression to estimate the response of the level of real output to permanent inflation shocks separately for each country we find that a permanent shock to inflation is not associated with a permanent movement in the level of real output for most countries in our sample the main exceptions are certain low inflation countries in which permanent inflation shocks permanently increase the level of output we also find that permanent inflation shocks do not permanently influence real output growth rates in our sample

banking a new monetarist approach we develop a model where i banks take deposits and make investments ii their liabilities facilitate third party transactions other models have i or ii not both although we argue they are intimately connected we show that they both emerge from limited commitment we describe an environment characterize desirable allocations and interpret the outcomes as banking arrangements banks are essential without them the set of feasible allocations is inferior as a technical contribution we characterize dynamically optimal credit allocations with frictions show they involve backloading and analyse how this interacts with banking we also confront the theory with economic history copyright 2013 oxford university press

financial fragility and the exchange rate regime abstract we study financial fragility exchange rate crises and monetary policy in a model of an open economy with diamond dybvig banks the banking system the exchange rate regime and central bank credit policy are seen as parts of a mechanism intended to maximize social welfare if the mechanism fails banking crises and speculative attacks on the currency become possible we compare currency boards fixed rates and flexible rates with and without a lender of last resort a currency board cannot implement a social optimum in addition it allows bank runs to occur a fixed exchange rate system may implement the social optimum but is more prone to bank runs and exchange rate crises than a currency board a flexible rate system implements the social optimum and eliminates runs provided that the exchange rate and credit policies of the central bank are appropriately designed journal of economic literature classification numbers f3 e5 g2

the role of independence in the green lin diamond dybvig model abstract green and lin study a version of the diamond dybvig model with a finite number of agents independence independent determination of each agent s type and sequential service for special preferences they show that the ex ante first best allocation is the unique equilibrium outcome of the model with private information about types via a simple argument it is shown that uniqueness of the truth telling equilibrium holds for general preferences and in particular for a constrained efficient allocation whether first best or not the crucial assumption is independence

banking crises and liquidity in a monetary economy abstract this study investigates banks liquidity provision using the lagos and wright model of monetary exchange with aggregate uncertainty we show that banks sometimes exhaust their cash reserves and fail to satisfy their depositors needs for consumption smoothing we also show that banking crises can be eliminated by a rate of return equalizing policy under perfect risk sharing but the first best outcome can be only achieved with the friedman rule these results cannot be obtained with other monetary models e g overlapping generations models we also derive a rich array of non trivial effects of inflation on equilibrium deposits the probability of banking crises and banks portfolios

individual acceptance of the biogas innovation a structural equation model abstract the rapid spread of biogas production in germany has resulted in an increased public debate over this new business branch today the production of biogas is much more controversially debated than several years ago at the same time it could be proven that even among farmers themselves the acceptance of biogas production in some regions is somewhat dampened due to accompanying collateral damages therefore the goal of this paper is to identify relevant influencing factors that determine the acceptance of the innovation biogas among farmers by applying a causal analysis initial results among the five investigated determinants show that not only an individual attitude toward biogas but also the farmers personal innovativeness strongly and significantly influences an individual s acceptance of the innovation biogas

banking panics and policy responses we study how banking panics unfold in av ersion of the diamond and dybvig 1983 model with limited commitment as is well known the banking authority could eliminate the possibility of a run on the banking system by committing to suspend payments to depositors if a run were to start once a run is under way however the banking authority will choose to reschedule rather than suspend payments we construct equilibria in which depositors run on the banking system with positive probability and we show that an equilibrium bank run in this setting is necessarily partial with only some depositors participating we also show that a run naturally occurs in waves with each wave of withdrawals prompting a further policy response from the banking authority the number of waves that occur in equilibrium is stochastic and can be arbitrarily large

money and credit redux do we need both money and credit in models with explicit roles for payment instruments we show the answer is no if credit is easy money is useless if credit is tight money can be essential but then credit is irrelevant and changes in debt limits are neutral real balances respond endogenously to leave total liquidity constant this is true for exogenous or endogenous policy and debt limits secured or unsecured credit and fairly general preferences and pricing mechanisms while we also show how to overturn some results the benchmark model suggests credit conditions matter less than some people think

money and capital as competing media of exchange we construct a model where capital competes with fiat money as a medium of exchange and we establish conditions on fundamentals under which fiat money can be both valued and socially beneficial when the socially efficient stock of capital is too low to provide the liquidity agents need they overaccumulate productive assets to use as media of exchange when this is the case there exists a monetary equilibrium that dominates the nonmonetary one in terms of welfare under the friedman rule fiat money provides just enough liquidity so that agents choose to accumulate the same capital stock a social planner would

optimal financial crises empirical evidence suggests that banking panics are related to the business cycle and are not simply the result of sunspots panics occur when depositors perceive that the returns on bank assets are going to be unusually low we develop a simple model of this in this setting bank runs can be first best efficient they allow efficient risk sharing between early and late withdrawing depositors and they allow banks to hold efficient portfolios however if costly runs or markets for risky assets are introduced central bank intervention of the right kind can lead to a pareto improvement in welfare from the earliest times banks have been plagued by the problem of bank runs in which many or all of the bank s depositors attempt to withdraw their funds simultaneously because banks issue liquid liabilities in the form of deposit contracts but invest in illiquid assets in the form of loans they are vulnerable to runs that can lead to closure and liquidation a financial crisis or banking panic occurs when depositors at many or all of the banks in a region or a country attempt to withdraw their funds simultaneously prior to the twentieth century banking panics occurred frequently in europe and the united states panics were generally regarded as a bad thing and the development of central banks to eliminate panics and ensure financial stability has been an important feature of the history of financial systems it has been a long and involved process the first cerntral bank the bank of sweden was established more than 300 years ago the bank of england played an especially important role in the development of effective stabilization policies in the eighteenth and nineteenth centuries by the end of the nineteenth century banking panics had been eliminated in europe the last true panic in england was the overend gurney company crisis of 1866

collateral secured loans in a monetary economy abstract this paper presents a microfounded model of money where durable assets serve as a guarantee to repay consumption loans we study a steady state equilibrium where money and credit coexist in such an equilibrium a larger investment in durable capital relaxes the borrowing constraint faced by consumers we show that the occurrence of over investment and the behavior of capital accumulation depend on the rate of inflation the relative risk aversion of agents and the marginal productivity of the capital goods

the impact of german biogas production on european and global agricultural markets land use and the environment abstract as part of its climate policy germany promotes the production of biogas via its so called renewable energy act eeg the resulting boost in biogas output went along with a significant increase in production of green maize the dominant feedstock existing studies of the eeg have analysed its impacts on german agriculture without considering market feedback we thus expand existing quantitative analysis by also considering impacts on european and global agricultural markets land use and the environment by combining a detailed location model for biogas plants the regionalised location information system maize resi m2012 with a global partial equilibrium model for agriculture the common agricultural policy regional impact capri model our results indicate that the german biogas production is large enough to have sizeable impacts on global agricultural markets in prices and quantities causing significant land use change outside of germany while profits in the agricultural sector increase food consumer face higher prices and subsidies for biogas production are passed on to electricity consumers the german biogas program as long as it is almost entirely based on non waste feedstocks is probably not a promising avenue towards a ghg saving renewable energy production but a rather expensive one

banking crises in monetary economies this paper analyzes the effect of inflation on banking crises in a model in which money and banks play essential roles the model s equilibrium replicates some key features of actual banking crises namely the partial suspension of payments and the desire to hold cash even in the absence of pressing liquidity needs when banks have access to a stable foreign currency inflation has a threshold effect on banking crises higher inflation reduces the likelihood of crises when inflation is below the threshold the reverse happens when inflation exceeds the threshold this result appears to be broadly consistent with available evidence jel category e40 e50

currency elasticity and banking panics theory and evidence existing models of banking panics contain no role for monetary factors and fail to explain why some banking systems experienced panics while others did not a monetary model is constructed where seasonal variations in the demand for liquidity and credit play a critical role in generating banking panics these panics occur when there are restrictions on the issue of currency in private banks but they do not occur if banks are unrestricted empirical evidence from canada and the united states for the period 1880 1910 is largely consistent with the predictions of the model

money financial stability and efficiency most analyses of banking crises assume that banks use real contracts however in practice contracts are nominal and this is what is assumed here we consider a standard banking model with aggregate return risk aggregate liquidity risk and idiosyncratic liquidity shocks we show that with non contingent nominal deposit contracts the first best efficient allocation can be achieved in a decentralized banking system what is required is that the central bank accommodates the demands of the private sector for fiat money variations in the price level allow full sharing of aggregate risks an interbank market allows the sharing of idiosyncratic liquidity risk in contrast idiosyncratic bank specific return risks cannot be shared using monetary policy alone real transfers are needed

crises in competitive versus monopolistic banking systems we study a monetary general equilibrium economy in which banks exist because they provide inter temporal insurance to risk averse depositors a banking crisis is defined as a case in which banks exhaust their reserve assets this may but need not be associated with liquidation of a storage asset when such liquidation does occur the result is a real resource loss to the economy and we label this a costly banking crisis there is a monetary authority whose only policy choice is the long run constant rate of growth of the money supply and thus the rate of inflation under different model specifications the banking industry is either a monopoly bank or a competitive banking industry it is shown that the probability of a banking crisis may be higher either under competition or under monopoly this is shown to depend on the rate of inflation in particular if the nominal rate of interest rate of inflation is below above some threshold a monopolistic banking system will always result in a higher lower crisis probability thus the relative crisis probabilities under the two banking systems cannot be determined independently of the conduct of monetary policy we further show that the probability of a costly banking crisis is always higher under competition than under monopoly however this apparent advantage of the monopoly banking is strictly due to the fact that it provides relatively less valuable inter temporal insurance

on money as a medium of exchange we analyze economies in which individuals specialize in consumption and production and meet randomly over time in a way that implies that trade must be bilateral and quid pro quo nash equilibria in trading strategies are characterized certain goods emerge endogenously as media of exchange or commodity money depending both on their intrinsic properties and on extrinsic beliefs there are also equilibria with genuine fiat currency circulating as the general medium of exchange we find that equilibria are not generally pareto optimal and that introducing fiat currency into a commodity money economy may unambiguously improve welfare velocity acceptability and liquidity are discussed

monetary policy banking crises and the friedman rule banking crises are frequent events gerard caprio and daniela klingebiel 1997 catalog over 80 banking crises during the last 25 years interestingly some banking crises are associated with no output losses whatsoever while others involve massive recessions finally it is known that the probability of a banking crisis rises as the rate of inflation rises see asli demirguc kunt and enrica detragiache 1997 john boyd et al 2001a b while received wisdom exists about the conduct of monetary policy while a crisis is underway there is no formal treatment of how the conduct of monetary policy during normal times affects the potential for banking crises to occur to fill that gap i consider economies where spatial separation and limited communication create a transactions role for money and random shocks to agents liquidity preferences create a role for banks in addition banks confront randomness in withdrawal demand when withdrawal demand is sufficiently high banks exhaust their cash reserves there are good reasons to associate this with a banking panic the output lost during a banking panic depends on how great withdrawal demand is some banking crises generate no output losses while others generate large reductions in resource availability in addition the conduct of monetary policy during normal times affects the probability of a banking crisis the higher the nominal interest rate the inflation rate the higher is the probability of a panic driving the nominal interest rate to zero following the friedman rule eliminates bank panics this constitutes a new rationale for the friedman rule nonetheless conventional methods of implementing the friedman rule never produce an optimal resource allocation in particular low nominal interest rates induce banks to hold large cash reserves thereby forgoing socially more productive investments in effect the friedman rule induces banks to become narrow banks voluntarily the banking system is very safe but it undertakes a suboptimal level of investment less conventional methods for implementing the friedman rule such as allowing unrestricted access to the discount window at a zero nominal interest rate lead either to the nonexistence of equilibrium or to massive indeterminacies none of the equilibria will be consistent with full optimality

collateral fluctuations in a monetary economy this paper studies economy wide fluctuations that occur endogenously in the presence of monetary and real assets using a standard monetary search model we consider an economy in which agents can increase consumption over and above what their liquid monetary asset holdings would allow pledging real assets as collateral for monetary loans it is shown that if the liquidation value of real assets is below full market value a stable cyclical equilibrium can emerge in consumption and capital around the unstable steady state we also provide conditions for the existence of cycles of higher order chaos and sunspot equilibria

liquidity monetary policy and the financial crisis a new monetarist approach a model of public and private liquidity integrates financial intermediation theory with a new monetarist monetary framework nonpassive fiscal policy and costs of operating a currency system imply that an optimal policy deviates from the friedman rule a liquidity trap can exist in equilibrium away from the friedman rule and there exists a permanent nonneutrality of money driven by an illiquidity effect financial frictions can produce a financial crisis phenomenon that can be mitigated by conventional open market operations working in an unconventional manner private asset purchases by the central bank are either irrelevant or they reallocate credit and redistribute income jel e13 e44 e52 e62 g01 liquidity is a class of assets that is useful in exchange some of these liquid assets are government liabilities federal reserve notes treasury bills and treasury notes some are private liabilities the deposit liabilities of banks and some asset backed securities for example conventional wisdom holds that the main role of a central bank is to manage public liquidity in a manner that controls inflation and enhances the provision of private liquidity and credit however the mechanism by which central bank actions work to perform this role still appears to be poorly understood as has been highlighted by the financial crisis and the ensuing policy responses the purpose of this paper is to build a model of public and private liquidity that captures the features of modern economies essential to the analysis of monetary policy and that can be used to shed light on some current monetary policy problems and questions what is a liquid asset and what roles do privately provided and publicly provided liquid assets play in exchange in a model where we capture these roles for liquid assets what are the implications for monetary policy under what circumstances can a liquidity trap occur how does monetary policy work when there is a positive quantity of excess reserves held by banks what does a financial crisis do to the supply of private liquidity and what should monetary policy do in response

bargaining rules for a thin spot water market markets for water rights have long been advocated to resolve user conflicts and to improve efficiency trelease 1961 hartman and seastone 1970 the potential for efficiency gains from market allocation of water has been well established burness and quirk 1979 eheart lyon and wong 1983 moore 1986 almost all studies of water markets address the transferability of long term water rights i e base or property rights eheart et al 1983 lyon 1986 saliba bush and martin 1987 crouter 1987 however rental or spot markets for water can improve efficiency by allowing allocational adjustments in line with changing conditions without disturbing the base rights system exchanges of either base rights or spot rights that entail a change in the point of diversion may result in third party effects even in the absence of return flow problems johnson gisser and werner 1981 eheart et al 1983 2 such third party effects place practical limits on the geographic scope of water exchanges and result in a thin market i e a market with few eligible participants thin markets are likely to be manipulated by participants leading to inefficiency unless suitable bargaining rules are designed to counter market manipulation the efficiency gains from water exchanges cannot be fully realized this paper uses multilateral bargaining models based on a game theoretic approach to address bargaining rules that will facilitate the efficient operation of a thin water market across a variety of bargaining environments institutional features such as the size of the water market the water rights system the distribution of farm sizes and the level of participants information define the bargaining environment the models are translated into computer simulations based on data representing irrigation water demand in the crane creek watershed of kankakee county illinois thin water markets are likely to be the rule rather than the exception especially in the u s west where many streams with insufficient flows are fully or overappropriated given this fact it is crucial to investigate how the efficiency of a thin water market is affected by the relative bargaining strengths of the participants and to suggest suitable bargaining rules that could improve the social gains achieved in thin water markets

inflation and the capital stock there is a long literature examining the theoretical relationship between the rate of inflation and the size of the capital stock in an economy this literature has produced varied predictions about the effects of inflation on the capital stock in this paper we present some time series evidence on this issue we estimate a structural var model for thirty four countries and discover that for the majority of these countries there is no statistically significant long run effect of inflation on the capital stock moreover for countries where a significant effect is found the long run coefficient estimate is typically positive overall our empirical results support the view that the long run level of the capital stock is invariant to permanent changes in the inflation rate

more than food or fuel stakeholder perceptions of anaerobic digestion and land use a case study from the united kingdom anaerobic digestion ad is of growing importance within the uk as it can make an important contribution to the countries energy and climate change targets with the growth of the sector discussions about competing land uses are likely to increase for a better understanding of the synergies between agricultural land its role and bioenergy the perception of the different stakeholders will play an important role the perception of stakeholders related to ad feedstock and energy crop production was investigated through interviews and a stakeholder workshop the results indicated that from an ad operator and feedstock producer perspective on farm ad is more an additional activity integrated into existing agricultural systems than a renewable energy technology the risk of a shift in agricultural practices and large areas to grow energy crops for ad is seen as low for the uk nonetheless land use and related challenges need to be considered as the demand for ad feedstocks increases with the fast growth of the sector considering the synergies between bioenergy and agriculture as well as the motivations and benefits perceived by stakeholders will play an important role in a successful policy design to provide the required emission reduction in both sectors without subverting sustainability

a contribution to the pure theory of money abstract this article analyzes a general equilibrium model with search frictions and differentiated commodities because of the many differentiated commodities barter is difficult in that it requires a double coincidence of wants and this provides a medium of exchange role for fiat currency we prove the existence of equilibrium with valued fiat money and show it is robust to certain changes in the environment rate of return dominance liquidity and the welfare implications of fiat money are discussed

banking in a matching model of money and capital we introduce banks in a model of money and capital with trading frictions banks offer demand deposit contracts and hold primary assets to maximize depositors utility if banks operating costs are small banks reallocate liquidity eliminating idle balances and improving the allocation at moderate costs idle balances are reduced but not eliminated at larger costs banks are redundant a central bank policy of paying interest on bank reserves can reverse inflation s distortionary effects and increase welfare but only when costs are small the threshold levels of banks costs increase with inflation suggesting inflation and banks utilization are positively associated

monetary stability and liquidity crises the role of the lender of last resort we study an economy where agents are subject to liquidity demand shocks and banks arise endogenously to insure consumers against these shocks in this environment we evaluate the desirability of a lender of last resort who can provide liquidity loans to banks in distress in the absence of a lender of last resort the economy has a unique stationary equilibrium the introduction of unlimited and costless lender of last resort services allows the economy to achieve a steady state allocation that is pareto optimal however this economy also displays a continuum of hyperin ationary equilibria we then explore restrictions on the provision of lender of last resort services that rule out such monetary instability while preserving some of the e ciency obtained by unrestricted lender of last resort services when the lender of last resort charges an interest rate on liquidity loans the economy has a unique steady state equilibrium and when the interest rate charged is high enough no hyperin ationary equilibria arise finally when the lender of last resort faces an upper bound on loanable funds there is again a unique long run equilibrium and when the upper bound on loanable funds is small enough hyperin ationary equilibria are ruled out

the seasonality of banking failures during the late national banking era in this paper we expand previous models with banks and money and explore the consequences of seasonals in the banking system we find that when bank failures occur not all of them have associated large output losses and currency premiums exist we show that the most important sources of seasonal fluctuations for the banking system are those related to the return on farming activities and the scrapping value of the initial investment finally this model is consistent with the notion that the treasury is more likely to accommodate the money market in periods where the liquidity needs

equilibrium bank runs we analyze a banking system in which the class of feasible deposit contracts or mechanisms is broad the mechanisms must satisfy a sequential service constraint but partial or full suspension of convertibility is allowed consumers must be willing to deposit ex ante we show by examples that under the so called optimal contract the postdeposit game can have a run equilibrium given a propensity to run triggered by sunspots the optimal contract for the full predeposit game can be consistent with runs that occur with positive probability thus the diamond dybvig framework can explain bank runs as emerging in equilibrium under the optimal deposit contract

financial panics the seasonality of the nominal interest rate and the founding of the fed after the founding of the fed in 1914 the frequency of financial panics and the size of the seasonal movements in nominal interest ratesboth declined substantially this paper establishes that the fed by carrying out the seasonal open market policy that eliminated the seasonal in nominal interest rates caused the decrease in the frequency of panics since seasonal movements are anticipated and financial panics are probably real events the results show that an anticipated monetary policy had real effects on the economy copyright 1986 by american economic association

anatomy of banking crises in developing and emerging market countries abstract this paper uses a binary classification tree bct model to analyze banking crises in 50 emerging market and developing countries during 1990 2005 the bct model identifies three conditions and the specific threshold of the key indictors at which the vulnerability to banking crisis increases i very high inflation ii highly dollarized bank deposits combined with nominal depreciation or low bank liquidity and iii low bank profitability which highlight that foreign currency risk poor financial soundness and macroeconomic instability are important drivers of banking crises the results also emphasize the importance of conditional thresholds in triggering crises in that banking crises are underlined by a combination of vulnerabilities or a sequence of non linear conditions rather than the deterioration of a unique factor