Early warning systems (EWS) for banking crises generally omit bank capital, bank liquidity and property prices. Most work on EWS has been for global samples dominated by emerging market crises where time series data on bank capital adequacy and property prices are typically absent. We estimate logit crisis models for OECD countries, finding strong effects from capital adequacy and liquidity ratios as well as property prices, and can exclude traditional variables. Higher capital adequacy and liquidity ratios have a marked effect on the crisis probabilities, implying long run benefits to offset some of the costs that such regulations may impose. JEL classification: C52, E58, G21

agency. Its remit is to conduct an independent evaluation of the Government’s fiscal policy. The Council fulfils its tasks primarily through the publication of the report Swedish Fiscal Policy, which is presented to the Government once a year. The report is used by the Riksdag as a basis for its evaluation of the Government’s policy. The Council also arranges conferences. In the series Studier i finanspolitik (Studies in fiscal policy), it publishes in-depth studies of different aspects of fiscal policy.

I, the undersigned, hereby declare that the work contained in this research assignment is my own original work and that I have not previously in its entirety or in part submitted it at any university for a degree. Stellenbosch University