Credit Growth and Economic Recovery in Europe After the Global Financial Crisis
IMF Working Papers, November 17, 2017
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- Credit Growth and Economic Recovery in Europe After the Global Financial Crisis
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Bibliographic details
- Authors: Sergei Antoshin, Marco Arena, Nikolay Gueorguiev, Tonny Lybek, John Ralyea, Etienne B Yehoue
- Published: November 17, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484329610.001
Core findings
- Post-GFC recoveries in Europe have been weaker than previous recoveries, with the “double-dip” recessions in 2011–12 in many countries and the worldwide reach of the GFC explaining the underperformance.
- Bank lending has been subdued and appears to have only held back the recovery relatively moderately.
- Relationships between credit growth and real activity have not changed significantly during and after the GFC.
Quantitative relationships between credit and real activity
- A 10 percent increase in bank credit to the private sector is associated with a rise of 0.6–1 percent in real GDP.
- A 10 percent increase in bank credit to the private sector is associated with a rise of 2–2½ percent in real private investment.
Bank lending determinants
- Loan quality, customer deposits, bank equity price index, and bank capital appear to be closely linked to bank lending.
Bank profitability
- Bank profitability is positively and significantly influenced by credit growth.
- The positive relationship between credit growth and bank profitability has weakened after the GFC.
Publication and authorship
- By Sergei Antoshin, Marco Arena, Nikolay Gueorguiev, Tonny Lybek, John Ralyea, Etienne B Yehoue
- November 17, 2017
- Pages: 54
- Issue: 256
- Series: Working Paper No. 2017/256
- ISBN: 9781484329610
- DOI: https://doi.org/10.5089/9781484329610.001
Source: Credit Growth and Economic Recovery in Europe After the Global Financial Crisis — IMF Working Paper (canonical URL: https://www.imf.org/en/publications/wp/issues/2017/11/17/credit-growth-and-economic-recovery-in-europe-after-the-global-financial-crisis-45411).