From the beginning of the 1980s, several kinds of banking crises have happened in many parts of the world, running from both developed, emerging and the developing economies. All these banking crises that occurred are caused by several factors (like volatility in terms of trade, inflation, high real interest rate, bank concentration, real growth of GDP, among others), that have led to the collapse of many banks, financial institutions and corporations of the world due to cross-border banking linkages (Stolbov, 2013). However, there is a need to know the meaning of banking crises, derive the understanding to be able to determine the factors attributing to these occurring systematic banking crises.
In more general terms, a banking crisis is any financial crises that affect many banks, financial institutions, and corporation whereby banks encounter difficulties in repayments of deposits. Meaning, banks run out of liquidity and they do not have enough cash to repay their depositors (World Bank, 2015). According to the Federal Reserve Bank of San Francisco (1985) banking crises occur when there is a sharp reduction of a bank’s total value of assets, resulting in the apparent or real insolvency of many banks and accompanied by some banks collapse and possibly some bank runs. Contemporarily, Caprio and Klingebiel (1996) defined banking crisis beginning from a sample of 69 countries of which information on bank insolvencies was available since the mid-1970s to 1998, with data developed from published sources and interviews with country economists. They described banking crisis as the occurrence of erosion of bank capital and higher estimated cost of resolving the occurrence of the crisis. Again, the analysis of Laeven and Valencia (2013, p. 63) defined banking crises as “occurring when a country’s corporate and financial sectors experience a large number of defaults and financial institutions and corporations face great difficulties repaying contacts on time”. They went further to explain that, as a result of this, nonperforming loans will increase rapidly, leading to deposit runs of most of these existing banks where they do not have enough capital to sustain their banking operations.
Moreover, a banking crisis is “a non-linear disruption to financial markets in which adverse selection and moral hazard problems become much worse so that financial markets are unable to efficiently channel funds to those who have the most productive investment opportunities” (Frederic Mishkin, 1996: p.17).
In addition, Demirg├╝c-Kunt and Detragiache (2005) after sampling 65 countries between 1980 and 1995 of their study perceived of banking crises as an episode banking in which the ration non-performing assets to total bank assets exceeds 10 percent and the costs of rescue operations exceed 2 percent of Gross Domestic Product (GDP). They believed that banking crises are bound to happen when banks are experiencing frequent signs and events such as bank failure, prolonged bank holidays, bank shutdowns, bank freezes and a large-scale bank nationalization. Corroborating, Sundararajan and Balino (1991) also see banking crises as “a situation in which a significant group of financial institutions has liabilities exceeding the market value of their assets, leading to runs and other portfolio shifts, the collapse of some financial firms, and government interventions” Sundararajan and Balino (1991: p. 3).
All these conceptualisations of banking crises clearly explain that banking crises that have occurred over the years do not just occur but rather takes inspiration from a combination of macroeconomic factors, institutional factors and some degree of moral hazard and adverse selection problems in the market. However, an attention should be drawn by researchers to importantly look at all these factors pertinent to banking crises since it has both short-term and long-term repercussions domestically and globally that may have a consequence on economic output and growth (Von Hagen ; Ho, 2007).

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