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A review of international studies on #currencymismatches and #debtcrises since the 1990s found that almost all financial and debt crises have been accompanied by deregulation, excessive debt growth and currency mismatches.
The above includes the Latin American debt crisis, the Asia financial crisis, the subprime mortgage crisis, the European debt crisis, the Argentine debt crisis, etc., currency mismatch indicators can successfully predict 11 of the 12 crises.
According to research by various international organizations, currency mismatches may lead to a 6-fold increase in the probability of systemic crisis in the banking industry, 12% increase of exchange rate overshooting , and 5.5% decline of GDP growth rate .
