INSTITUTIONAL QUALITY AND FINANCIAL INSTABILITY

This paper assess the impact of the institutional quality on banking stability using an intensive and extensive margin analysis. The empirical study highlights that the exposure to systemic risk of financial institutions and the probability of banking crisis in a given country is positively associat...

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Bibliographic Details
Main Author: Daniela BALUTEL
Format: Article
Language:English
Published: Technopress 2020-06-01
Series:Journal of Public Administration, Finance and Law
Subjects:
Online Access:http://www.jopafl.com/uploads/issue17/INSTITUTIONAL_QUALITY_AND_FINANCIAL_INSTABILITY.pdf
Description
Summary:This paper assess the impact of the institutional quality on banking stability using an intensive and extensive margin analysis. The empirical study highlights that the exposure to systemic risk of financial institutions and the probability of banking crisis in a given country is positively associated with a high level of corruption, political instability and low regulatory quality. Additional, we found that the effect of the rule of law on the probability of crisis occurrences depends on the level of country development, while for the systemic risk the effect is positive in both developed and developing economies.
ISSN:2285-2204
2285-3499