Recent Credit Stagnation in the Mena Region: What to Expect? What Can Be Done?

By Ralph Chami, Raphael A Espinoza, Adolfo Barajas, Heiko Hesse

September 1, 2010

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Ralph Chami, Raphael A Espinoza, Adolfo Barajas, and Heiko Hesse. Recent Credit Stagnation in the Mena Region: What to Expect? What Can Be Done?, (USA: International Monetary Fund, 2010) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the recent credit slowdown among Middle Eastern and North African (MENA) countries from three analytical angles. First, it finds that, similar to other regions and to its past history, a credit boom preceded the current slowdown, and that a protracted period of sluggish growth is likely going forward. Second, it uncovers a key role played by bank funding (deposit growth and external borrowing slowed considerably) but whose effect was frequently dampened by expansionary monetary policy. Third, bank-level fundamentals - capitalization and loan quality - helped to explain differences in credit growth across banks and countries.

Subject: Bank credit, Banking, Credit, Credit booms, Financial statements, Money, Oil prices, Prices, Public financial management (PFM)

Keywords: Bank, Bank capital, Bank credit, Bank soundness argument, Banks balance sheet, Central bank, Credit, Credit boom, Credit booms, Credit culture, Credit growth, Credit slowdown, Deposit, Financial statements, GDP ratio, Global, Lending growth, Oil prices, WP

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/219
Stock No:

WPIEA2010219
ISBN:

9781455208845
ISSN:

1018-5941

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