Banking Structure and Credit Growth in Central and Eastern European Countries
IMF Working Papers, September 1, 2008
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- Banking Structure and Credit Growth in Central and Eastern European Countries
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Bibliographic details
- Authors: Burcu Aydin
- Published: September 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451870732.001
Summary and key findings
- Recent developments have increased questions about vulnerabilities in Central and Eastern European Countries (CEE) that are experiencing credit booms.
- This paper analyzes the role of foreign-owned banks in these credit booms.
- Principal empirical findings:
- The CEE countries depend on foreign banks.
- These foreign banks depend on interbank funding.
- Lending by foreign banks seems driven by economic growth and interest rate margins.
- This lending appears independent of economic but not financial conditions in the foreign bank's home country.
Subject matter and keywords
- Subject: Bank credit, Banking, Credit, Foreign banks, State-owned banks
- Keywords: CEE country, CEE subsidiary, credit growth, parent bank, WP
Data coverage and scope
- Pages: 44
- Series: Working Paper No. 2008/215
- Volume: 2008
- Issue: 215
Implications highlighted in the paper
- High dependence of CEE banking systems on foreign-owned banks implies potential vulnerability to cross-border funding dynamics.
- Dependence of foreign banks on interbank funding indicates liquidity channel risks that may amplify credit cycles in CEE.
- The finding that lending by foreign banks is linked to financial conditions in the parent bank's home country (but not to its economic conditions) points to the importance of monitoring parent-bank financial health for host-country credit stability.
Source: Burcu Aydin, "Banking Structure and Credit Growth in Central and Eastern European Countries", IMF Working Paper No. 2008/215, September 1, 2008; Pages: 44; Volume: 2008; Issue: 215; DOI: https://doi.org/10.5089/9781451870732.001; ISBN: 9781451870732; ISSN: 1018-5941.
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