European Parliament Library

The Credit Boom in the EU New Member States :, Bad Luck or Bad Policies?

Abstract
In the past decade, most of the EU New Member States experienced a severe credit-boom bust cycle. This paper argues that the credit boom-bust cycle was to a large extent the result of factors external to the region (“bad luck”). Rapid credit growth followed from a high liquidity in global markets and the particular attractiveness of “new Europe” for capital flows, while the end of the credit cycle was brought about by a global crisis. However, the fact that some countries managed to avoid most of the excesses, including asset price bubbles and foreign exchange lending, suggests that policies and policy failures (“bad policies”)—in particular overly expansionary macroeconomic settings and excessively optimistic views on prudential risks—also have played a critical role
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. The Nature and Origins of the Credit Boom of 2003-07/08; 1. Cumulative Net Capital Inflows, 2003-07; 1. Cumulative Capital Inflows, 2003-07; 2. The Surge in Capital Inflows; 3. Capital Inflows and Reforms; 2. Net Private Capital Flows; 4. The Surge in Capital Inflows--by Type of Capital; 5. Capital Inflows and Private Sector Credit; 6. Credit Growth; 7. Private Sector Credit Growth; 8. Credit to GDP Ratio, 2008; 9. Credit, Domestic Demand and GDP; 10. The Credit Boom Led to Rising Imbalances
Language
eng
Literary Form
non fiction
Note
"May 2010."
Physical Description
1 online resource (56 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781462387021

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