01861cas a2200253 a 4500 AALejournalIMF006248 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451962239 1018-5941 BD-DhAAL BD-DhAAL Detragiache, Enrica. Responding to Banking Crises : Lessons From Cross-Country Evidence / Enrica Detragiache, Giang Ho. Washington, D.C. : International Monetary Fund, 2010. 1 online resource (33 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 A common legacy of banking crises is a large increase in government debt, as fiscal resources are used to shore up the banking system. Do crisis response strategies that commit more fiscal resources lower the economic costs of crises? Based on evidence from a sample of 40 banking crises we find that the answer is negative. In fact, policies that are riskier for the government budget are associated with worse, not better, post-crisis performance. We also show that parliamentary political systems are more prone to adopt bank rescue measures that are costly for the government budget. We take advantage of this relationship to instrument the policy response, thereby addressing concerns of joint endogeneity. We find no evidence that endogeneity is a source of bias. Mode of access: Internet Ho, Giang. IMF Working Papers; Working Paper ; No. 2010/018 Full text available on IMF http://elibrary.imf.org/view/journals/001/2010/018/001.2010.issue-018-en.xml IMF e-Library