The Effect of Financial Crises on Banking Performance in Developed and Emerging Economies

Abstract

The aim of the study is to examine the effect of crises on the stability of the bankingsystem in 46 developed and emerging economies for the years 1999–2014. The variables are tested by using the two-step dynamic panel data analysis. The results indicate that the banking crises have an impact on the banking system stability. On the other hand, it is obsereved that the comparative conditions and the volatility on asset prices are the determinants on performance-stability relations. The most important finding is that the credit to GDP gap influence bank performance negatively.