When does financial liberalization make banks risky?
Subtitle: an empirical examination of Argentina, Canada and Mexico
By: William C. Gruben, Jahyeong Koo and Robert R. Moore.
Contributors: Koo, Jahyeong.; Moore, Robert R.
Series: Research Department working paper ;; 9905; Working paper (Federal Reserve Bank of Dallas. Research Dept. : Online) ;; 9905.
Publisher: Federal Reserve Bank of Dallas
Published: 1999
Place of publication: [Dallas, Tx.]
Language: eng
Format: Electronic resource
Subjects: Bank loans -- Argentina.; Bank loans -- Mexico.; Bank loans -- Canada.
Description: "In the literature on systemic banking crises, two common themes are: (1) lack of market discipline encourages risky lending and (2) financial liberalization or privatization lead to risky lending. However, there is evidence to suggest that neither financial liberalization nor weak market discipline always precedes risky lending. We test for depositor discipline and, separately for post-liberalization or post-privatization risky lending in Argentina, Canada, and Mexico. In the countries without market discipline, lending risk increases significantly in the wake of liberalization. Where depositors discipline banks, banks neither behave riskily nor does their risk increase in the wake of privatization"--Federal Reserve Bank of Dallas web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.