Recent research has shown that 85% of the severe banking crises which have occurred in the past fifteen years concerned developing and transition economies. My explanation for this striking fact is that the factors which cause banking crises are generally more prevalent, but not essentially different in emerging markets than in industrialised countries.
They are not, because the idiosyncratic situation in one Member State can easily spill over to other countries and to the EU as a whole. A fiscal crisis typically only breaks out at the end of a longer process of unhealthy and unsustainable development, although budgetary distress is sometimes – but not always – visible earlier on.