Abstract
Banking crises take a variety of forms ranging from temporary liquidity crises to massive insolvencies. They sometimes coincide with other financial crises in currency and sovereign debt markets, and sometimes occur in isolation. These differences reflect the variety of causal influences that give rise to problems for banks. The unusually crisis-prone experience of the United States historically reflected its unique industrial organization of banking. Policies intended to reduce the incidence of banking crises (especially deposit insurance) have instead often increased the risk of crises, as safety-net protection reduces market discipline, allowing banks to undertake imprudent risks.
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Calomiris, C.W. (2018). Banking Crises. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2193
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2193
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