Financial Crises, Social Impact, and Risk Management : Lessons and Challenges

This paper reviews lessons learned from financial crises; describes the channels of transmissions of economic booms and busts in crisis vulnerable economies; and highlights the central role of external factors, credit and the mitigating role of the public sector, with a broad focus on the impact on...

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Main Author:	Guerschanik Calvo, Sara
Format:	Working Paper
Language:	en_US
Published:	World Bank, Washington, DC 2013
Subjects:	credit allocation risk management booms and busts mitigation financial crises coping strategies household impact macrofinancial-risk management public service-risk management micro-risk management economic adjustment transmission of economic shock migrant remittances earnings deceleration
Online Access:	http://hdl.handle.net/10986/16339

id	okr-10986-16339
recordtype	oai_dc
spelling	okr-10986-163392021-04-23T14:03:28Z Financial Crises, Social Impact, and Risk Management : Lessons and Challenges Guerschanik Calvo, Sara credit allocation risk management booms and busts mitigation financial crises coping strategies household impact macrofinancial-risk management public service-risk management micro-risk management economic adjustment transmission of economic shock migrant remittances earnings deceleration This paper reviews lessons learned from financial crises; describes the channels of transmissions of economic booms and busts in crisis vulnerable economies; and highlights the central role of external factors, credit and the mitigating role of the public sector, with a broad focus on the impact on the poor from developing countries. Financial crises increase poverty, may increase income inequality and may deteriorate human development indicators such as health and education. Public sector credit and international reserves have proven effective in preventing a fully-fledged financial crisis, as has concurrent external support, though these mitigating actions have not been effective in preventing a drop in gross domestic product (GDP) even in economies perceived to be well managed such as Chile in 1999-2000 and 2009. While public banks provide an additional tool for crisis management in the short run, credit misallocation and efficiency losses due to politically motivated lending are still widespread. 2013-12-02T21:28:30Z 2013-12-02T21:28:30Z 2013-09-23 http://hdl.handle.net/10986/16339 en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research Latin America & Caribbean
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	credit allocation risk management booms and busts mitigation financial crises coping strategies household impact macrofinancial-risk management public service-risk management micro-risk management economic adjustment transmission of economic shock migrant remittances earnings deceleration
spellingShingle	credit allocation risk management booms and busts mitigation financial crises coping strategies household impact macrofinancial-risk management public service-risk management micro-risk management economic adjustment transmission of economic shock migrant remittances earnings deceleration Guerschanik Calvo, Sara Financial Crises, Social Impact, and Risk Management : Lessons and Challenges
geographic_facet	Latin America & Caribbean
description	This paper reviews lessons learned from financial crises; describes the channels of transmissions of economic booms and busts in crisis vulnerable economies; and highlights the central role of external factors, credit and the mitigating role of the public sector, with a broad focus on the impact on the poor from developing countries. Financial crises increase poverty, may increase income inequality and may deteriorate human development indicators such as health and education. Public sector credit and international reserves have proven effective in preventing a fully-fledged financial crisis, as has concurrent external support, though these mitigating actions have not been effective in preventing a drop in gross domestic product (GDP) even in economies perceived to be well managed such as Chile in 1999-2000 and 2009. While public banks provide an additional tool for crisis management in the short run, credit misallocation and efficiency losses due to politically motivated lending are still widespread.
format	Publications & Research :: Working Paper
author	Guerschanik Calvo, Sara
author_facet	Guerschanik Calvo, Sara
author_sort	Guerschanik Calvo, Sara
title	Financial Crises, Social Impact, and Risk Management : Lessons and Challenges
title_short	Financial Crises, Social Impact, and Risk Management : Lessons and Challenges
title_full	Financial Crises, Social Impact, and Risk Management : Lessons and Challenges
title_fullStr	Financial Crises, Social Impact, and Risk Management : Lessons and Challenges
title_full_unstemmed	Financial Crises, Social Impact, and Risk Management : Lessons and Challenges
title_sort	financial crises, social impact, and risk management : lessons and challenges
publisher	World Bank, Washington, DC
publishDate	2013
url	http://hdl.handle.net/10986/16339
_version_	1764432903881621504

Financial Crises, Social Impact, and Risk Management : Lessons and Challenges

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