Lending Booms, Real Estate Bubbles and the Asian Crisis

Author/Editor:

Abdelhak S Senhadji ; Charles Collyns

Publication Date:

February 1, 2002

Electronic Access:

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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 examines the link between lending booms, asset price cycles, and financial crises across East Asian countries. Both theoretical arguments and empirical evidence support a strong relationship between bank lending and asset price inflation, especially in the real estate market. While asset price bubbles were present in most Asian countries during the 1990s, their subsequent bust has affected countries quite differently. Some countries underwent severe exchange and financial crises, while others were able to weather the storm with much less damage. This experience underlines the importance of a strong bank regulatory system.

Series:

Working Paper No. 02/20

Subject:

English

Publication Date:

February 1, 2002

ISBN/ISSN:

9781451843859/1018-5941

Stock No:

WPIEA0202002

Format:

Paper

Pages:

46

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