Monetary Economics: Impact of Systematic and Non-Systematic Banking Crises on Financial Reforms

Monetary economics

Contents
INTRODUCTION...........................................................................................................................1
LITERATURE REVIEW................................................................................................................1
Literature review..........................................................................................................................1
Missing literature.........................................................................................................................3
METHODOLOGY..........................................................................................................................3
Research model............................................................................................................................3
Research data...............................................................................................................................4
Summary......................................................................................................................................4
RESULTS........................................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Monetary economics is the study of analysing the money and its relationship with the real
economy (Aboody, Hughes and Ozel, 2014). This project is related with monetary economics
and the evaluation to identify the ways how systematic and non systematic banking crises
impacts financial reforms. The evaluation of influence is the main aim of this essay which is
important to be analysed. The rationale behind addressing this question is to identify the patterns
by which banking crises are causing reversals in financial reforms (Banking Crises and
Reversals in Financial Reforms*, 2020). By addressing this research question, the real life
problem of uninformed financial reforms can be solved. In this research, the question has raised
that whether systematic and non systematic banking crises affects financial reforms and
addressing this question will lead to answer to the real life problem that what is the intensity of
both banking crises and to which level it influences financial reforms. The hypothesis which
devised in this research essay is that banking crises is the most important factor which influences
financial reforms.
LITERATURE REVIEW
Literature review
According to Ahrend and Goujard, (2012), Banking crises is the emergency situation in
which more than one banks are facing the issue of insolvency and liquidity in the financial
system. Banking crises does not only have the national implications but the international
implications as well. Typically banking crises lead two situations that are either the capital in
baking system has been exhausted or non performing loans or assets have been increased
substantially over capital infrastructure. It is generally considered that combination of all the
banks and financial institutions form the financial system of a nation and when this system fails,
the whole economy is impacted.
From the viewpoints of Ahrend, Goujard and Schwellnus, (2012), A Systemic banking crisis
refers to the situation under which all or substantially all of the banks within a country face
liquidity problem at the same time and are under serious solvency issues. This might happen
because all of the banks are hit by the same external factor or because failure in one bank has led
to failure in other banks in the system. Non-Systemic banking crisis, on the other hand, affects
only a single bank due to inefficiency and negligence in operations or management of the bank.
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