International Banking Crises A Dossier Mauro F Guill n Frequency of Financial Crises Twin crisis banking currency Triple crisis banking currency sovereign debt Source Luc Laeven and Fabian Valencia Systemic Banking Crises A New Database IMF WP 08 224 Selected Banking Crises Country Initial Year Spain 1977 Nonperforming Loans at Peak n a Gross Fiscal Cost GDP 5 6 4 Year Output Loss GDP 2 2 Egypt 1980 n a 38 1 n a Chile 1981 35 6 42 9 92 4 Senegal 1988 50 0 17 0 32 6 USA 1988 4 1 3 7 4 1 Sweden 1991 13 0 3 6 0 0 India 1993 20 0 n a 3 1 Brazil 1994 16 0 13 2 0 0 Mexico 1994 18 9 19 3 4 2 Japan 1997 35 0 24 0 17 6 Korea 1997 35 0 31 2 50 1 China 1998 20 0 18 0 36 8 Russia 1998 40 6 6 0 0 0 Turkey 2000 27 6 32 0 5 4 Argentina 2001 20 1 9 6 42 7 Source Luc Laeven and Fabian Valencia Systemic Banking Crises A New Database IMF WP 08 224 Sample N 66 Source Carmen M Reinhardt and Kenneth S Rogoff This Times is Different NBER WP 13882 2008 Source Carmen M Reinhardt and Kenneth S Rogoff This Times is Different NBER WP 13882 2008 Genesis of a Crisis Excess Global Liquidity Originate andDistribute Model Mortgage Securitization Mispricing of Risk Scant Regulatory Oversight Rising Real Estate Prices Deterioration of Underwriting Standards Low Interest Drive to Increase Rates Investment Returns Credit Default Swaps Excessive Financial Leverage Crisis Mauro F Guill n The Wharton School Growing Importance of Finance Note Financial services and insurance accounted for 7 8 of U S GDP in 2006 Housing Prices Subprime Defaults Mortgage Defaults by Country Source Analistas Financieros Internacionales based on OECD data Debt Leverage Regulatory Balkanization Office of Thrift Supervision Federal Deposit Insurance Corporation Office of the Comptroller of the Currency Federal Reserve Commercial Banks Thrifts Bank Holding Companies Industrial Loan Companies Individual States Insurance Companies Department of Labor Securities and Exchanges Securities and Exchange Commission Source The New York Times 5 October 2008 Sunday Business Section p 9 Credit Unions National Credit Union Administration Futures Commodity Futures Trading Commission Artist Laura Gilbert http www securitiesdocket com 2008 10 04 the zero dollar bill Possible Actions Guarantees on deposits most countries Lowering of reserve requirements Deposit freeze e g Argentina 01 Bank holiday Liquidity assistance Unloading of bad debt Insurance of bad debt Bank intervention restructuring e g Spain 77 Sweden 91 Mexico 94 Japan 97 Korea 97 China 98 Turkey 00 Bank liquidations e g Spain 77 Egypt 80 Chile 81 Senegal 88 USA 88 Sweden 91 Japan 97 Korea 97 Russia 98 Turkey 00 Stumbling Along Activist Fed Liquidity Assistance So Far Countrywide BoA IndyMac Gov t Washington Mutual JPM Wachovia WF or Citi Freddie Mac Gov t Fannie Mae Gov t Bear Stearns JPM Merrill Lynch BoA Lehman Brothers Goldman Sachs Morgan Stanley GE Capital AIG Gov t Turned into bank holding companies The Investment Banks The Wall Street Tournament Biggest Write Downs European Woes Britain Northern Rock HBOS Bradford Bingley France Soci t G n rale Switzerland UBS Germany IKB Deutsche Industriebank Hypo Real Estate the Landesbanks Benelux Fortis Dexia Italy UniCredit Spain The small savings banks Ireland Bank of Ireland Allied Irish Bank and four others Iceland Glitnir Bank Resurgent Sun Sumitomo Mitsui Financial Group invested 1 bn in Barclays Mizuho invested 1bn in Merrill Lynch Mitsubishi UFJ is paying 3 5 bn for 35 of UnionBanCal 8 4 bn for 20 of Morgan Stanley Nomura has bought the Asian European and Middle Eastern divisions of Lehman Sovereign Funds to the Rescue Barclays PLC Quatar Investment Authority Source Sovereign Wealth Fund Institute 7 7 3 483 When the end of the world arrives how will the media report it USA Today WE RE DEAD National Enquirer O J AND NICOLE TOGETHER AGAIN Wired THE LAST NEW THING Rolling Stone THE GRATEFUL DEAD REUNION TOUR Discover Magazine HOW WILL THE EXTINCTION OF ALL LIFE AS WE KNOW IT AFFECT THE WAY WE VIEW THE COSMOS Inc Magazine TEN WAYS YOU CAN PROFIT FROM THE APOCALYPSE The Wall Street Journal DOW JONES PLUMMETS AS WORLD ENDS The Economist WORLD EXTINCT CAPITALISM SURVIVES