IMF economists study emergence of ‘zombie banks’

Country-level factors tend to be more important than bank-level ones, authors find

International Monetary Fund Headquarters 2, Washington, DC
Photo: John Harrington

Research published by the International Monetary Fund (IMF) says geographical factors have the biggest impact in determining whether a bank turns into a “zombie” institution.

The authors Torsten Wezel, Hannah Sheldon and Zhengwei Fu aim to address what they see as a gap in the literature. Previous studies, they say, have explored the problems created by zombie banks – which continue to stumble along, despite being insolvent – but not why such banks come into being. 

In their working paper

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