BoE paper calls for international standards on 'broader co-ordination'
Credit growth in rest of world has large positive effect on probability of domestic banking crises
A working paper published by the Bank of England has found evidence that foreign credit growth can help predict domestic banking crises, strengthening the argument for international standards on financial risk.
Ambrogio Cesa-Bianchi, Fernando Eguren Martin and Gregory Thwaites use a new data set linking credit growth and financial crises for 38 economies (both advanced and emerging) between 1970 and 2011, in their paper Foreign booms, domestic busts: the global dimension of banking crises.
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