Credit Growth and Bank Soundness Fast and Furious?
We examine the risks to bank soundness associated with credit booms in a large set of countries. Using bank-level data in 90 countries between 1995 and 2005, we analyze the relationship between credit growth and bank soundness taking into account the potential two-way causality. We find that, while...
Main Author: | |
---|---|
Other Authors: | |
Format: | eBook |
Language: | English |
Published: |
Washington, D.C.
International Monetary Fund
2011
|
Series: | IMF Working Papers
|
Subjects: | |
Online Access: | |
Collection: | International Monetary Fund - Collection details see MPG.ReNa |
Summary: | We examine the risks to bank soundness associated with credit booms in a large set of countries. Using bank-level data in 90 countries between 1995 and 2005, we analyze the relationship between credit growth and bank soundness taking into account the potential two-way causality. We find that, while sounder banks tend to grow faster at moderate-growth periods, credit growth becomes less dependent on soundness during booms. These findings shed some light on why credit booms are often associated with financial crises |
---|---|
Physical Description: | 27 pages |
ISBN: | 9781463925956 |