Assessing and Managing Rapid Credit Growth and the Role of Supervisory and Prudential Policies

By Ceyla Pazarbasioglu, Gudrun Johnsen, Paul Louis Ceriel Hilbers, Inci Ötker

July 1, 2005

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Format: Chicago

Ceyla Pazarbasioglu, Gudrun Johnsen, Paul Louis Ceriel Hilbers, and Inci Ötker. Assessing and Managing Rapid Credit Growth and the Role of Supervisory and Prudential Policies, (USA: International Monetary Fund, 2005) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews trends in bank lending to the private sector, with a particular focus on Central and Eastern European countries, and finds that rapid growth of private sector credit continues to be a key challenge for most of these countries. The paper discusses possible implications for economic and financial stability and the policy options available to counter and reduce these risks. It argues that the authorities will need to focus on the implications for both the macro economy and the financial system and, depending on their assessment, may need a comprehensive policy response comprising a mix of macro and prudential policies. In particular where there are limitations to the effective use of monetary and fiscal measures, supervisory and prudential policy responses will have a key role in addressing financial stability concerns.

Subject: Bank credit, Banking, Credit, Credit booms, Credit risk, Financial institutions, Financial regulation and supervision, Loans, Monetary expansion, Money

Keywords: Bank credit, Boom episode, Boom period, CEE country, Composition of credit, Credit, Credit boom, Credit booms, Credit culture, Credit demand, Credit growth, Credit growth process, Credit quality, Credit risk, Eastern Europe, Financial stability, Interest rate, Lending boom, Loan portfolio, Loans, Private sector, Rate spread, Supervisory and prudential policies, WP

Publication Details

Pages:

58
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/151
Stock No:

WPIEA2005151
ISBN:

9781451861709
ISSN:

1018-5941

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