A rapidly growing empirical literature is studying the causes and consequences of
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methodologies adopted in cross-country empirical studies, the signals approach and
the multivariate probability model, and their application to study the determinants
of banking crises. The use of these models to provide early warnings for crises is
also reviewed, as are studies of the economic effects of banking crises and of the
policies to forestall them. The paper concludes by identifying directions for future research.
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