European Parliament Library

Are Weak Banks Leading Credit Booms? Evidence from Emerging Europe, Deniz Igan, Natalia Tamirisa

Abstract
This paper examines the behavior of bank soundness indicators during episodes of brisk loan growth, using bank-level data for central and eastern Europe and controlling for the feedback effect of credit growth on bank soundness. No evidence is found that rapid loan expansion has weakened banks during the last decade, but over time weaker banks seem to have started to expand at least as fast as, and in some markets faster than, stronger banks. These findings suggest that during credit booms supervisors need to carefully monitor the soundness of rapidly expanding banks and stand ready to take action to limit the expansion of weak banks
Language
eng
Literary Form
non fiction
Note
Bibliographic Level Mode of Issuance: Monograph
Physical Description
1 online resource (23 pages), illustrations, tables.
Specific Material Designation
remote
Form Of Item
online
Isbn
9786612841705

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