Bank Credit, Asset Prices and Financial Stability: Evidence From French Banks
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper analyses the effect of asset prices on credit growth in France and tries to disentangle credit demand and supply factors, both for the whole 1993-2010 period and during periods of financial instability. Using bank-level panel data at a quarterly frequency, stock price growth is shown to have a significant effect on lending growth over the whole period, but without credit supply factors being singled out. By contrast, housing price growth has a significant effect during periods of financial instability only, even after controlling for credit demand effects. These results show that credit demand factors do play a large role but also provide evidence of tighter credit constraints on households in financial instability periods.
Series:
Working Paper No. 2012/103
Subject:
Asset prices Bank credit Banking Credit Financial institutions Loans Money Prices Real estate prices
English
Publication Date:
April 1, 2012
ISBN/ISSN:
9781475502930/1018-5941
Stock No:
WPIEA2012103
Pages:
40
Please address any questions about this title to publications@imf.org