Financial Conditions and Growth at Risk in the ECCU
IMF Working Papers, November 15, 2019
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- Financial Conditions and Growth at Risk in the ECCU
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Bibliographic details
- Authors: Takuji Komatsuzaki, Steve Brito
- Published: November 15, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513513294.001
Summary of study and methods
- Authors: Takuji Komatsuzaki, Steve Brito
- Date: November 15, 2019
- Framework: Growth at Risk (GaR) framework with a focus on financial variables
- Scope: Eastern Caribbean Currency Union (ECCU)
Key findings
- Excessive bank credit growth is associated with lower future real GDP growth in the medium term, especially on the low quantiles of the growth distribution.
- Worsening of both global financial conditions and external conditions are associated with lower future growth in the short term, especially at the high quantiles of the growth distribution.
- Country-specific results are broadly in line with ECCU-wide results, with some variation potentially due to:
- strong Citizenship-By-Investment program inflows
- lack of credit union data
Policy implications and recommendations
- The establishment of a macroprudential framework in the ECCU should:
- pay close attention to credit growth not only of banks but also credit unions
- continue to monitor global and external conditions
Subjects and keywords (as listed)
- Subjects: Bank credit, Credit, Credit bureaus, Environment, Financial markets, Financial sector policy and analysis, Financial soundness indicators, Money, Natural disasters
- Keywords: Bank credit, Caribbean, Credit, Credit bureaus, downside risks, ECCU country, ECCU economy, estimate, Financial soundness indicators, Global, growth rate, macrofinancial linkages, Natural disasters, NPL ratio, quantile, quantile regression coefficients, regression coefficient, WP
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- Working Paper