Banking crises early warning systems and the differences between developed and developing countries in terms of warning signals produced

Developing Early Warning Systems is valuable in the context that it may allow economy and banking authorities to prevent or mitigate an approaching crisis. In this study, to develop an Early Warning System for banking crises, banking crises occurred in OECD countries and major big economies between 1970 and 2020 are examined by probit methodology. Regressions for banking crises have produced significant results when pooled geographically and and the geographic contagion is a new study area yet, made it a must to focus on geographic contagion. A dummy variable to capture the contagion among geographic regions is an innovative step compared to previous studies in the literature. Empirical analysis indicates that Early Warning Signals for banking crises differ between developed and developing countries.