02487cas a2200325 a 4500 AALejournalIMF022205 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513599861 1018-5941 BD-DhAAL BD-DhAAL Pizzinelli, Carlo. Assessing Banking and Currency Crisis Risk in Small States : An application to the Eastern Caribbean Currency Union / Carlo Pizzinelli, Kotaro Ishi, Tariq Khan. Washington, D.C. : International Monetary Fund, 2021. 1 online resource (34 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 To complement the early warning signals literature, we study the determinants of banking and currency crises for small states and currency boards. Building on the crisis dataset by Laeven and Valencia (2020), we estimate a binominal logit model to identify the determinants of crises, and as a case study, we apply our models to the Eastern Caribbean Currency Union (ECCU). Our findings largely confirm past studies' results that both external and domestic fundamentals matter in predicting crisis likelihood, but we find that small states and fixed exchange rate regimes are more sensitive to these fundamentals, compared to larger economies. Our empirical results also suggest that for currency board economies, keeping a high level of the foreign reserve cover-the 'backing ratio' defined as official foreign reserves as a share of central bank demand liabilities-is critical to reduce the likelihood of both banking and currency crises. The backing ratio is particularly important during years of global economic downturn. Mode of access: Internet Banking Crises, Currency Crises and Early Warning Signals imf Current Account Adjustment imf Financial Crises imf Forecasting and Other Model Applications imf Short-Term Capital Movements imf Ishi, Kotaro. Khan, Tariq. IMF Working Papers; Working Paper ; No. 2021/276 Full text available on IMF http://elibrary.imf.org/view/journals/001/2021/276/001.2021.issue-276-en.xml IMF e-Library