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Determinants of Bank Credit in Emerging Market Economies
Author:
Vahram Stepanyan null

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Kai Guo
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Series:
IMF Working Papers
Volume/Issue:
Volume 2011: Issue 051
Language:
English
Publication Date:
01 Mar 2011
DOI:
https://doi.org/10.5089/9781455218035.001
ISBN:
9781455218035
ISSN:
1018-5941
Pages:
20
Keywords:
WP; credit growth; deposit rate
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We examine changes in bank credit across a wide range of emerging market economies during the last decade. The rich time-series and cross-section information allows us to draw broader lessons compared to many existing researches, which focus on a specific set of emerging market economies or on shorter time periods. Our results show that domestic and foreign funding contribute positively and symmetrically to credit growth. The results also indicate that stronger economic growth leads to higher credit growth, and high inflation, while increasing nominal credit, is detrimental to real credit growth. We also find that loose monetary conditions, either domestic or global, result in more credit, and that the health of the banking sector also matters. Finally, we discuss some policy lessons.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund