01592cas a2200241 a 4500 AALejournalIMF001228 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451851908 1018-5941 BD-DhAAL BD-DhAAL Gupta, Poonam. Aftermath of Banking Crises : Effectson Real and Monetary Variables / Poonam Gupta. Washington, D.C. : International Monetary Fund, 2000. 1 online resource (25 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students In this paper a simple optimizing model is developed to analyze the implications of a banking crisis. Banks are incorporated by assuming that they intermediate funds between firms and households. It is shown that when depositors perceive the quality of deposits to have deteriorated, they switch from deposits to cash. Because of the higher cost of liquidity, consumption, M2 and the M2 multiplier decline, interest rates on deposits and loans increase and output contracts. The findings of the paper match the key stylized facts of banking crises. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2000/096 Full text available on IMF http://elibrary.imf.org/view/journals/001/2000/096/001.2000.issue-096-en.xml IMF e-Library