European Parliament Library

Rapid Credit Growth :, Boon or Boom-Bust?

Abstract
Episodes of rapid credit growth, especially credit booms, tend to end abruptly, typically in the form of financial crises. This paper presents the findings of a comprehensive event study focusing on 99 credit booms. Loose monetary policy stances seem to have contributed to the build-up of credit booms across both advanced and emerging economies. In particular, domestic policy rates were below trend during the pre-peak phase of credit booms and likely fuelled macroeconomic and financial imbalances. For emerging economies, while credit booms are associated with episodes of large capital inflows, international interest rates (a proxy for global liquidity) are virtually flat during these periods. Therefore, although external factors such as global liquidity conditions matter, and possibly increasingly so over time, domestic factors (especially monetary policy) also appear to be important drivers of real credit growth across emerging economies
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; Executive Summary; I. Introduction; 1. Nominal Credit to Private Sector; 2. Crises Associated with Emerging Market Credit Booms; II. How are Credit Booms Identified?; A. Identifying Credit Booms: An Example; 3. Indonesia: Identifying Credit Booms; B. Focusing Only on Bank Credit Could Yield Misleading Policy Implications; 4. Korea: Identifying Credit Booms; III. What Do Credit Booms Look Like?; 5. Credit Dynamics during Booms; 6. Credit Booms: Duration; 7. Peaks of Credit Booms Over Time
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (56 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781283566438

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