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

Author/Editor: Aisen, Ari | Franken, Michael
Authorized for Distribution: February 1, 2010
Electronic Access: Free Full Text (PDF file size is 1,280KB)
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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: 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.
 
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Series: Working Paper No. 10/47
Subject(s): Bank credit | Banking systems | Business cycles | Credit expansion | Cross country analysis | Economic growth | Economic integration | Economic models | Financial crisis | Global Financial Crisis 2008-2009 | Liquidity | Monetary policy
Author's keyword(s): Bank credit | credit boom | bust cycles | monetary policy
 
English  
    Published:   February 1, 2010        
            Format:   Paper
    Stock No:   WPIEA2010047   Pages:   25
    Price:   US$18.00 (Academic Rate: US$18.00 )
       
     
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