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Article Dans Une Revue Brussels Economics Review Année : 2010

Financial instability and economic cycles: A model of banking crisis

Karim Elasri
  • Fonction : Auteur

Résumé

After the recent cross-border financial crisis, this paper aims to develop a new framework in order to portray the dynamics of current banking systems. In a dynamic model, international banks adopt different strategies of risk according to the economic cycle phases. It describes a mechanism by which even cautious entities are urged on adopting risky behaviors to remain competitive and attract capital. Such a new framework based on an uncommon (positive) approach is completed by simulations demonstrating that this process inexorably leads to a banking liquidity crisis, hence the importance of banking regulations for financial stability.
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Dates et versions

hal-03591624 , version 1 (28-02-2022)

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  • HAL Id : hal-03591624 , version 1

Citer

Nicolas Huchet, Karim Elasri. Financial instability and economic cycles: A model of banking crisis. Brussels Economics Review, 2010, 54 (3/4), pp.393-413. ⟨hal-03591624⟩

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