454) define abundant credit as a ratio of private bank credit to GDP of about 83% over the 1990–2010 period, and a stable banking system as one that has been crises-free since 1970. These authors focus on the structure of the banking system and the rules for allocating credit as the key explanation for banking instability, and in order to explain why banking systems vary in structure, they identify two key variables, regime type and the presence or absence of a populist coalition.Ĭalomiris and Haber ( 2014, p. These outcomes, in turn, determine banking system’s performance along two dimensions: propensity for banking crisis and the degree of private access to credit (p. The Game of Bank Bargains determines the rules that define how banks are regulated, how they are chartered, and how they interact with the state. 1 Each country is different: It has different rules of the game, specific players with distinctive interests, governments who get different shares of the benefits, and coalitions that forge specific “ bank banking bargains.” According to them, banking systems are the result of political struggles (“ bank bargains”) between government, voters, and interest groups. It borrows and builds on the arguments developed by Calomiris and Haber ( 2014) who have argued that banking systems arise from a process of political bargaining: Every country’s banking system is the result of what they call a Game of Bank Bargains-a game in which actors with differentiated interests come together to form coalitions that will determine how banking systems are created and how they will operate: “Banks’ strengths and shortcomings are the predictable consequence of political bargains and those bargains are structured by a society’s fundamental political institutions” (p. This book examines the “fragility” and historical crises proneness of the Spanish banking system, with a particular focus on the most recent banking crisis that followed the global financial crisis
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