Bank Credit During the 2008 Financial Crisis: A Cross-Country Comparison

February 1, 2010

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Format: Chicago

Ari Aisen, and Michael Franken. Bank Credit During the 2008 Financial Crisis: A Cross-Country Comparison, (USA: International Monetary Fund, 2010) accessed September 19, 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 empirically estimates the main determinants of bank credit growth during the 2008 financial crisis. Using a sample covering over 80 countries, this paper finds that larger bank credit booms prior to the crisis and lower GDP growth of trading partners are among the most important determinants of the post-crisis bank credit slowdown. Structural variables such as financial depth and integration were also relevant. Finally, countercyclical monetary policy and liquidity played a critical role in alleviating bank credit contraction after the 2008 financial crisis, suggesting that countries should pursue appropriate institutional and macroeconomic frameworks conducive to countercyclical monetary policies.

Subject: Bank credit, Banking, Credit, Credit booms, Financial crises, Financial markets, Global financial crisis of 2008-2009, Money, Money markets

Keywords: Asia and Pacific, Bank credit, Bank credit growth, Bust cycles, Credit, Credit boom, Credit booms, Crisis, Europe, External shock, Global, Global financial crisis of 2008-2009, Monetary policy, Money market rate, Money markets, Post crisis, Return on equity, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/047
Stock No:

WPIEA2010047
ISBN:

9781451963120
ISSN:

1018-5941

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