Determinants of Bank Credit in Emerging Market Economies

 
Author/Editor: Guo, Kai ; Stepanyan, Vahram
 
Publication Date: March 01, 2011
 
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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: We examine changes in bank credit across a wide range of emerging market economies during the last decade. The rich time-series and cross-section information allows us to draw broader lessons compared to many existing researches, which focus on a specific set of emerging market economies or on shorter time periods. Our results show that domestic and foreign funding contribute positively and symmetrically to credit growth. The results also indicate that stronger economic growth leads to higher credit growth, and high inflation, while increasing nominal credit, is detrimental to real credit growth. We also find that loose monetary conditions, either domestic or global, result in more credit, and that the health of the banking sector also matters. Finally, we discuss some policy lessons.
 
Series: Working Paper No. 11/51
Subject(s): Bank credit | Banking sector | Credit expansion | Cross country analysis | Economic growth | Emerging markets | Inflation | Monetary policy

Author's Keyword(s): bank credit | emerging markets
 
English
Publication Date: March 01, 2011
Format: Paper
Stock No: WPIEA2011051 Pages: 20
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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