Towards an early warning system for banking crises: the case of emerging countries in Asia and Latin America.

Summary The objective of this thesis is to contribute to the elaboration of an early warning system of banking crises for emerging countries in Asia and Latin America. Such a contribution is all the more essential as their crises are more frequent and the costs of resolution are more expensive. This thesis is constructed in three chapters. In the first chapter, we have examined the different ways of fighting banking crises. We have highlighted the ineffectiveness of crisis management measures, then we have underlined the limits of preventive measures, and finally, we have noted the absence of a crisis early warning system dedicated to emerging countries, while underlining the possible applications. In chapters 2 and 3 we have attempted to develop an early warning system based on a univariate and a multivariate technique and using, for the first time, banking variables. The application of both techniques leads to three main results. First, the Asian and Latin American banking crises are better predicted when banking, macroeconomic and institutional variables are considered simultaneously. Second, variables lagged by one year predict crises better than those lagged by two or three years. Finally, some variables show consistent significance in both methods, mainly the real GDP growth rate, foreign capital flows to GDP, bad debt reserves to total assets and net income to total assets.