It is well known that banks play a central role in the economy through their financial intermediation (BIS, 2002), and that their efficiency has an impact on economic growth (Rajan and Zingales, 1998; Levine, 1997, 1998). In contrast, bank insolvencies can result in systemic crises which have adverse consequences for the economy as a whole. Caprio and Klingebiel (2003) provide information on 117 systemic banking crises that have occurred in 93 countries and 51 borderline and smaller banking crises in 45 countries since the late 1970s.