Financial liberalization and bank crisis : empirical evidence from Algeria using logistic model

Abstract EN

This paper estimates effects of Algerian financial liberalization policy on possibility of bank crises using a logistic regression (logit) model (1970-2018).

We find that financial liberalization would have no significant and immediate impact on crisis.

Results show that inflation rate, exchange rate, and fuel exports have a very significant impact on occurrence of crises in Algeria.

On other hand, internal liberalization by granting loans or external financial liberalization through liberalization of financial market and capital account has no impact on crisis.