Did the Basel Accord Cause a Credit Slowdown in Latin America?

Drawing from a unique data set comprising 2,893 banks and 152 countries over the period 1987 to 2000, we test whether the adoption of the Basel Accord by Latin American and Caribbean countries was responsible for the serious slowdowns in credit growth experienced by these countries. We find that, on...

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Bibliographic Details
Main Author: Cosimano, Thomas
Other Authors: Barajas, Adolfo, Chami, Ralph
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2005
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a Did the Basel Accord Cause a Credit Slowdown in Latin America?  |c Thomas Cosimano, Ralph Chami, Adolfo Barajas 
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651 4 |a United States 
653 |a Depository Institutions 
653 |a State supervision 
653 |a Credit 
653 |a Asset requirements 
653 |a Capital adequacy requirements 
653 |a Banks 
653 |a Finance 
653 |a Industries: Financial Services 
653 |a Banks and banking 
653 |a Monetary economics 
653 |a General Financial Markets: Government Policy and Regulation 
653 |a Monetary Policy, Central Banking, and the Supply of Money and Credit: General 
653 |a Micro Finance Institutions 
653 |a Financial Institutions and Services: Government Policy and Regulation 
653 |a Mortgages 
653 |a Basel Core Principles 
653 |a Loans 
653 |a Banks and Banking 
653 |a Bank credit 
653 |a Banking 
653 |a Money and Monetary Policy 
653 |a Financial services law & regulation 
653 |a Finance: General 
700 1 |a Barajas, Adolfo 
700 1 |a Chami, Ralph 
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520 |a Drawing from a unique data set comprising 2,893 banks and 152 countries over the period 1987 to 2000, we test whether the adoption of the Basel Accord by Latin American and Caribbean countries was responsible for the serious slowdowns in credit growth experienced by these countries. We find that, on average, both bank capitalization and lending activities in Latin America increased after Basel. Consequently, Basel did not seem to lead to an overall credit decline. However, we do find evidence that loan growth became more sensitive to some risk factors. Our study suggests that the upcoming adoption of Basel II might cause greater procyclicality of credit