Predictors of bank distress: The 1907 crisis in Sweden |
| |
| Institution: | 1. Department of Economics, Lund University, Box 7080, Lund S-220 07, Sweden;2. Knut Wicksell Centre for Financial Studies, Sweden;1. Exeter Business School, University of Exeter, EP4 4QJ United Kingdom;2. Cork University Business School, University College Cork, T12 K8AF Ireland;1. Department of Economics, CIREQ & IZA, Université de Montréal, C.P. 6128 succursale Centre-ville, Montréal, QC H3C 3J7, Canada;2. CIREQ, Université de Montréal, Canada;1. Centre for Mathematical Sciences, Lund University, Lund, Sweden;2. Department of Economic History, Lund University, Lund, Sweden;1. Department of Business Information systems, Cork University Business School, University College Cork (UCC), Ireland;2. INFANT SFI Center, UCC, Cork, Ireland |
| |
| Abstract: | This paper studies the Swedish experience of the international crisis of 1907, which is often compared with the crisis of 2008. By constructing a new dataset from previously unanalyzed monthly bank-level data, we document high-frequency changes in bank outcomes throughout the 1907 crisis. While distressed banks suffered substantial withdrawals of foreign funds and liquid domestic liabilities, we show that banks’ asset structures, along with observable fundamentals and institutional characteristics, played a more significant role in their subsequent fate. Higher shares of non-performing assets and lending against equities were the most important balance sheet predictors of distress. These balance sheet fundamentals, as well as over-extended branch networks, significantly shortened the lifespan of Swedish banks in the aftermath of the 1907 crisis. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
