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  • Why is Banking Industry Prone to Crises?  By : Leigh Hawkins
    Macroeconomic shocks are very likely to negatively affect the bank balance sheets and the solvency of most of the banks. For example, the financial panic from Argentina in 1980 was preceded by an unstable macroeconomic and financial policy during which peso overvaluation triggered a period of decreased borrowing that put a downward pressure on the quality of bank assets.