Bank credit, asset prices and financial stability: Evidence from French banks

 
Author/Editor: Pouvelle, Cyril
 
Publication Date: April 01, 2012
 
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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. 12/103
Subject(s): Asset prices | Bank credit | Banks | Corporate sector | Credit demand | Credit expansion | Economic models | Financial stability | Household credit | Housing prices | France

Author's Keyword(s): Credit growth | asset prices | financial stability
 
English
Publication Date: April 01, 2012
Format: Paper
Stock No: WPIEA2012103 Pages: 39
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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