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Rapid Credit Growth in Central and Eastern Europe
Back Matter

Back Matter

Author(s):
Charles Enoch, and Inci Ötker
Published Date:
March 2007
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    Index

    Compiled by Sue Carlton

    • Abiad, A. 78

    • acquis communautaire 273

    • administrative measures (quantitative limits) 148, 151, 189, 225, 234, 259, 285, 356, 366

    • Albania 13, 36, 275

    • Arcalean, C. 271

    • Asian financial crisis (1997–98) 6, 138, 141, 175, 254

    • Association of Commercial Banks (ACB) 149

    • Autoregressive Distributed Lag (ARDL) 77

    • Backé, P. 77

    • Balassa-Samuelson effect 26

    • Bank of Estonia (BoE) 175, 177, 179

    • Bank of Greece (BoG) 285, 289–90, 291–4

    • Bank of Latvia (BoL) 187, 188

    • Bank of Lithuania (BL) 200–2

    • Bank of Portugal (BoP) 302, 303, 307

    • bank privatization 23, 47, 49, 60, 61, 92, 145, 276, 352

      • see also foreign-owned banks; under individual countries

    • Bank of Spain (BoS) 315

    • bank supervision 23, 28–9, 40, 51, 96–9, 102–7, 119, 279–81

      • administrative measures (quantitative limits) 148, 151, 189, 225, 234, 259, 285, 356, 366

      • communication tool 179, 356

      • cross-border cooperation 107, 321–30, 331–7, 341–5, 356, 366

        • cooperation between home and host supervisors 342

        • industry concerns 342–4

        • lead supervisors 343

      • information enhancing measures 148–9

      • monitoring measures 122–4

      • moral suasion measures 96, 149, 167, 169, 179–80, 188, 202, 259, 308, 356

      • prospects for 344–5

      • prudential measures 120–2, 137–40, 149–50, 152, 167, 169, 291–2

      • role of supervisors 137–42

      • see also Bulgarian National Bank (BNB); Croatian National Bank (CNB); under individual countries

    • banking sector

      • bank failures 138–9, 141

      • competition 36–7, 48, 49, 93, 149, 160, 183, 230, 231–2

      • and deposit growth 100, 174, 181, 209–10, 212, 247, 307

      • foreign ownership 7–8, 23–5, 39–40, 60–1, 92, 274–9, 339–42, 366

      • reform 23, 29, 49

      • shock-absorbing capacity 37–40, 86, 93, 138, 217, 257

      • see also bank privatization; bank supervision

    • Basel Concordat (1983) 342

    • Basel I 145, 296, 304

    • Basel II 202, 293, 332, 336, 337, 342, 343

    • BCR bank (Romania) 215

    • Belarus

      • nature of credit growth 111

      • policy responses 92

    • Boissay, F. 75

    • Borio, C. 49, 96

    • Bosnia and Herzegovina 13, 22

      • policy responses 98, 129

    • Bulgaria 145–52

      • bank privatization 243, 245, 246, 247

      • bank supervision 150, 244, 246, 259

      • credit boom 236–60

      • credit-to-GDP ratio 54, 55

      • currency board arrangement 245, 247, 259

      • equilibrium credit-to-GDP ratios 79, 81

      • and excessive credit growth 56, 58, 60, 61–2, 75

      • exchange rate regime 59

      • factors underlying credit growth 145–8

      • financial crisis (1997) 26, 47, 55

      • and foreign currency lending 72, 244, 247

      • foreign-owned banks 243, 257, 275

      • household lending 246–7

      • interest rates 146, 149, 245

      • macroeconomic background 239

      • nature of credit growth 111

      • policy responses 129, 148–51, 245, 259

        • effectiveness of 151–2

    • Bulgarian National Bank (BNB) 47, 148–52, 245

    • Bussière, M. 253

    • Calvo-Gonzalez, O. 75

    • Central Credit Register (CCR) 148–9

    • Committee of European Banking Supervisors (CEBS) 321, 322, 329, 331–2

      • guidelines/home-host framework 321–4, 336–7

      • Supervisory Review and Evaluation

        • Process (SREP) 321, 324–9

        • allocation of tasks and legal

        • responsibilities 328–9

        • information exchange 327–8, 337

        • significance/systemic relevance 325–7

    • consolidating supervisor 323, 324, 325–9, 341, 342, 343–5

    • consumer lending 9, 148, 220, 279

      • see also household debt

    • consumer protection 9, 149, 291, 292

    • Core Principles of Effective Banking Supervision 342

    • corporations/enterprises

      • financial structure of 17–19

      • loans to 25, 55, 69, 70, 74, 76, 87, 229, 270, 286, 306

    • Cottarelli, C. 50, 74

    • crawling band mechanism 205–6, 354

    • credit, importance as source of finance 15–21

    • credit booms 49–50, 154, 168

      • and bank supervision 139–40, 150

      • and banking crises 14, 33, 85–6, 254

      • in transition countries 14, 30, 75–6, 236–60

        • background 237–44

        • causes 238, 244–6

        • characteristics 238, 246–8

        • Croatia 155–69

        • macroeconomic risks 250–4

        • opportunities 248–50

        • policy options 257–60

        • risks for financial stability 254–7

    • credit growth

      • analysis of 84–9

      • causes/factors 21–8, 40, 154, 231–2, 312–15, 353

        • cyclical factors 26–8, 271

        • demand-side factors 183–5, 286–8, 296, 305–6, 350

        • policy-related factors 26

        • supply-side factors 181–3, 289–91, 296, 306–7, 352

        • transition-related factors 22–6, 47–8

      • common trends in CEE countries 268–71

      • and credit composition 61–3

      • measuring 5

      • monetary/prudential interface 6–7

        • see also monetary policy; prudential regulations

      • nature of 87–8, 111–14, 229–30, 349–50, 351

      • popularity of 5

      • problems of 8–9

      • recent developments in CEE countries 89–93

      • risks from 34–7, 103, 104–5, 254–7, 315–17, 352–4, 355

        • see also macroeconomic stability/risks

      • see also credit booms; excessive credit growth

    • credit-to-GDP ratios 13–14, 22, 30–1, 48–9, 54, 55–6, 68–70, 240–1

      • equilibrium levels 50, 51–2, 56, 59, 67–8

        • estimating 74–9, 81

          • method and data issues 74–7

          • and observed credit-to-GDP ratios 78–9, 80

          • results 77–8

    • Croatia 154–69

      • bank privatization 158–61

      • banking crisis 155

      • credit booms 155–699

        • first (1995–98) 155–8

        • second (2000-present) 158–68

      • credit-to-GDP ratio 22, 54, 55

      • current account deficit 156–8, 162

      • equilibrium credit-to-GDP ratios 79, 81

      • and excessive credit growth 56, 58, 60, 75

      • exchange rate regime 59, 60–1

      • features of banking system 157

      • foreign currency lending 72, 162, 163, 168, 279

      • and foreign-owned banks 60, 158–60, 161, 275

      • and household debt 34, 156, 161, 165

      • interest rates 156, 160, 162–3, 168–9

      • nature of credit growth 112

      • policy responses 98, 130, 162–8, 169

      • rising foreign debt 162–8

    • Croatian National Bank (CNB) 61, 155, 162–8, 169

    • Croatian Postal Bank 160

    • currency board arrangements (CBAs) 101, 172, 173, 174, 178, 179, 245, 247, 259

    • current account deficits 30, 92–3, 147, 156–8, 162, 186, 197

    • Czech Republic

      • and foreign currency lending 72, 74

      • foreign-owned banks 7, 275, 339

    • De Nederlandsche Bank (DNB) 331, 332–5, 337

    • Dell’Ariccia, G. 74

    • deregulation 22–3, 26, 300, 314–15, 318, 352

    • direct inflation targeting (DIT) 212

    • dollarization 244

    • Duenwald, C. 253

    • dynamic provisioning tool 317, 356

    • EBRD (European Bank for Reconstruction and Development) 29

      • index of banking sector reforms 23, 255–6

      • Transition Reports 13, 240

    • ECB (European Central Bank) 14, 17, 294–5, 299, 310

    • Égert, B. 77

    • EMU (European Economic and Monetary Union) 8, 305–7, 308, 310, 314, 318

    • equity financing 17–19, 20–1

    • ERM (Exchange Rate Mechanism) 304

      • ERM2 101, 183, 186

    • Estonia 172–80

      • bank privatization 172

      • bank supervision 178, 180

      • credit growth cycles

        • first (1990s) 172, 179

        • second (2001-present) 176–9

      • credit-to-GDP ratio 54, 55

      • currency board arrangement (CBA) 172, 173, 174, 178, 179

      • equilibrium credit-to-GDP ratios 79, 81

      • and excessive credit growth 56, 60, 61–3

      • exchange rate regime 59

      • and foreign currency lending 72, 74, 176–7

      • foreign investment 173–4

      • foreign-owned banks 7, 60, 61, 176, 178, 179, 180, 275

      • and household debt 34, 61–3, 177, 178

      • interest rates 178

      • nature of credit growth 112

      • policy responses 92, 98, 131, 178–9

      • Stabilization Reserves 174, 175

    • Euribor 56

    • euroization 100, 101, 176, 220, 222, 225, 364

    • European Company Statute 323–4

    • European Economic and Monetary Union (EMU) 8

    • European Monetary System (EMS) 304

    • European Union (EU)

      • accession to 7, 55, 84, 93, 100, 154, 216, 350, 352

        • Bulgaria and 246

        • Croatia and 162

        • Estonia and 176

        • Latvia and 181–3

        • Portugal and 300

        • and property market 272, 273

        • Romania and 223, 227, 239, 245, 246, 247

      • and bank supervision 342, 343–4

      • Capital Requirements Directive (CRD) 322, 323, 327, 328–9, 335, 342

      • Codified Banking Directive (2000) 323, 329, 342

      • Second Banking Directive (1993) 301, 304

      • structural funds 197, 200, 352

    • ‘evergreening’ 254

    • excessive credit growth 5–6, 47–64, 67, 257–8, 267, 352

      • credit composition 61–3

      • detecting 50–8

        • data 54–5

        • estimating credit elasticities 52–3

        • test strategy 53–4

        • test using benchmarks 55–6

        • test using CEE country data 58

      • empirical literature 49–50

      • and exchange rate regimes 59–61

      • see also credit-to-GDP ratios, equilibrium levels

    • exchange rate regimes 26, 30, 35, 59–61, 74, 92, 258, 271

      • crawling band mechanism 35, 205–6

      • and flexibility 30, 35, 59, 96, 101, 245, 271, 354

    • financial accelerator effect 194

    • financial accelerator mechanism 32, 33, 85

    • Financial and Capital Market Commission 188

    • Financial Sector Assessment Programs (FSAPs) 244, 294

    • financial soundness indicators (FSIs) 6, 88, 352

    • financial stability 33–40, 81, 84, 85–7, 147, 203, 279–80, 316–17, 352–4

      • and banks’ shock-absorbing capacity 37–40, 86, 93, 138

      • risk factors 34–7, 254–7

    • financial structure, and economic growth 15, 16, 25, 28–9

    • fiscal policy 101, 115, 205, 251, 259, 354–6, 366

    • foreign currency lending 8, 26, 34–5, 59–60, 70–4, 88, 200, 268, 278–9, 350

      • foreign sources of financing 18–19

      • see also under individual countries

    • Foreign Direct Investment (FDI) 32, 35, 146, 176, 236, 239, 240

    • foreign-owned banks 7–8, 23–5, 39–40, 60–1, 92, 274–9, 339–40, 366

      • and efficiency 276–7

      • and financial stability 341–2

      • and internal capital markets 335–6

      • policy implications 279–81

    • Furfine, C. 96

    • Glogowski, A. 34

    • Goldstein, M. 85

    • Goodhart’s Law 5, 11

    • Greece 284–95

      • bank supervision 291–4

      • causes of rapid credit growth 286–91

        • demand side 286–9

        • supply side 289–91

      • evolution of private sector loans 284–6

      • household debt 287, 288, 294

      • interest rates 287, 287–9, 289, 290, 291

      • policy responses 131, 291–4

        • prudential measures 291–2

        • recent developments 294

        • supervisory framework 293–4

    • Hellenic Data Protection Authority 292

    • Hernando, I. 316

    • Hodrick-Prescott filter 49

    • Home-Host guidelines see Committee of European Banking Supervisors (CEBS), guidelines

    • household sector

      • assets and liabilities structure 17, 18

      • and excessive credit growth 61–3

      • house prices 26, 37, 61, 273–4

      • household lending 25, 26, 74, 75–6, 79, 87, 147, 149, 150

        • see also under individual countries

      • housing market 9–10, 61–2, 184–5, 196, 267, 271–4, 279, 305, 315, 318, 350

    • Hungary

      • credit-to-GDP ratio 54, 55

      • equilibrium credit-to-GDP ratios 79, 81

      • and excessive credit growth 56, 58, 75

      • foreign currency lending 279

      • foreign-owned banks 7, 275, 339

      • nature of credit growth 112

      • policy responses 92

    • HVB 280

    • Iceland 131

    • inflation 10, 29–31, 78, 156, 162, 174, 186, 192, 200, 203, 250–1, 258

      • disinflation 186, 205, 212, 215, 225, 239, 244, 245

      • targeting 212, 221, 225, 245

    • information enhancing measures 148–9, 356

    • initial public offerings (IPOs) 17

    • interest rates 24, 25–6, 34, 56, 75, 78, 254, 270, 273, 286, 350

      • foreign currency borrowing 8, 59, 61, 74, 88, 92, 101, 165, 276, 278

      • international 154, 162, 165–6, 168, 279

      • see also under individual countries

    • International Monetary Fund (IMF) 3–5, 6, 49–50, 217, 250, 294

    • Jankov, L. 155

    • Joshi, B. 253

    • Kaminsky, G. 85

    • Kiss, G. 75

    • Kozluk, T. 75

    • Kraft, E. 155

    • KredEx 63

    • Latvia 3, 181–9

      • bank supervision 188

      • credit-to-GDP ratio 54, 55, 181

      • current account deficit 186

      • equilibrium credit-to-GDP ratios 79, 81

      • and equity financing 19

      • and excessive credit growth 56, 58, 61, 63

      • factors underlying credit growth 181–5

        • demand factors 183

        • supply factors 181–3

      • foreign currency borrowing 72, 186–7

      • foreign-owned banks 275

      • household debt 181, 183, 185, 186, 188

      • interest rates 183–4, 188

      • nature of credit growth 113

      • policy responses 98, 131, 187–9

        • future options 188–9

      • and risks of credit growth 185–7

    • Law on Banks and Savings Banks (1993) (Croatia) 155

    • liberalization 22–3, 26, 48, 51, 78, 154, 155–6, 168, 231

    • Lithuania 190–202

      • assessing risks to banking sector 197–200

      • bank privatization 193

      • bank supervision 192, 201–2

      • banking crisis (1995–96) 192

      • catch-up processes 190–2

      • credit-to-GDP ratio 54, 55

      • current account deficit 197

      • current phase of credit expansion 194–7

      • equilibrium credit-to-GDP ratios 79, 81

      • and equity financing 19

      • and excessive credit growth 56, 60

      • exchange rate regime 59

      • foreign-owned banks 7, 192–3, 275

      • household debt 191, 193, 196, 199

      • interest rates 192–3, 194, 197, 200, 201

      • lifting of credit constraints 192–3

      • nature of credit growth 113

      • policy responses

        • dilemmas 200–1

        • measures taken 201–2

    • Lizondo, S. 85

    • loan-to-value (LTV) ratio 291–2

    • loans

      • eligibility requirements 150

      • loan classification 150

      • loan quality 38–9, 186, 254

      • provisioning requirements 150

      • see also foreign currency lending;

        • household sector, household lending;

        • mortgage; nonperforming loans

    • Lowe, P. 49, 96

    • Macedonia, foreign-owned banks 275

    • macroeconomic stability/risks 25, 29–33, 84, 85–7, 147, 185–7, 203, 205, 250–4, 315–16, 352

    • Maeso-Fernandez, F. 78

    • Marginal Reserve Requirement (MRR) 96, 165–6, 167, 169

    • Martinez-Carrascal, C. 316

    • Mean Group Estimator (MGE) 77

    • Mehl, A. 29

    • Mexico, banking crisis (1994) 254

    • Mody, A. 78

    • Moldova

      • nature of credit growth 113

      • policy responses 98, 132

    • monetary policy 26, 101, 115, 258–9, 354, 358–62, 364, 366

      • Bulgaria 245

      • and Croatian credit booms 156–8, 160–1, 162–3, 168, 169

      • and currency board arrangements (CBAs) 172, 179, 245

      • Greece 285, 295

      • Latvia 187–8

      • Poland 205–6, 212

      • Romania 221, 222, 225–6, 245, 259

      • Spain 316, 318

    • monetary transmission mechanism (MTM) 207–8

    • moral suasion 96, 149, 167, 169, 179–80, 188, 202, 259, 308, 356

    • mortgages 34, 61, 63, 70, 87, 184, 185, 223, 234–5, 247, 259, 274, 307

    • Nagy, M. 75

    • National Bank of Poland (NBP) 205–12

    • National Bank of Romania (NBR) 214, 217, 221–5, 239, 245, 259

    • National Bank of Slovakia (NBS) 233–4

    • National Bank of Ukraine (NBU) 259–60

    • nonperforming loans (NPLs) (bad loans) 38–9, 49, 93, 139, 141–2, 186, 203, 276–7, 299

      • Bulgaria 150, 254, 255

      • Croatia 161

      • Greece 289

      • Romania 215, 254, 255

      • Slovakia 229

      • Ukraine 254, 255

    • Nordic bank crisis (1990s) 138, 141

    • Osbat, C. 78

    • Pesaran, M.H. 77

    • Poland 203–13

      • bank privatization 208, 339

      • bank supervision 205

      • equilibrium credit-to-GDP ratios 79, 81

      • and equity financing 19

      • foreign currency lending 34–5, 72, 279

      • and foreign-owned banks 7, 339

      • growing economic imbalances 204–5

      • household debt 17, 203, 204

      • and household deposits 209–10, 212

      • interest rates 205, 206, 207–8, 212, 280

      • policy responses 99, 101, 132

        • assessment of adopted measures 207–12

        • measures taken 205–6

    • policy responses 92–107, 115–36, 187–9, 291–4, 354–66

      • targets and instruments 10–11

      • see also bank supervision; fiscal

        • policy; monetary policy; prudential

        • regulations; under individual countries

    • Pooled Mean Group Estimator 75

    • Portugal 296–310

      • bank privatization 296, 302, 303

      • banking liberalization 299–305, 310

      • credit growth in run-up to EMU

        • demand-side factors 305–6

        • supply-side factors 306–7

      • indebtedness 297–9, 309

      • interest rates 299, 300, 303, 304, 305–6, 307, 309, 310

      • monitoring build-up of risk 307–10

      • new financial institutions 300–2, 303

      • policy responses 133

      • state-owned banking sector (1975–83) 299–300

    • privatization 22–3, 184–5, 239, 240, 272

      • see also bank privatization

    • prudential measures/regulations 102–5, 137–40, 149–50, 188, 221, 225, 291–4, 356, 366

    • quantitative limits see administrative measures

    • Reinhart, C. 85

    • Romania 214–27

      • bank privatization 215, 243, 245, 246, 247

      • bank supervision 216–17, 220, 225, 244, 246

      • characteristics of credit growth 217–20

      • credit boom 236–60

      • credit-to-GDP ratio 54, 55, 56, 257

      • equilibrium credit-to-GDP ratios 79, 81

      • excessive credit growth 58, 61, 75

      • foreign currency lending 72, 226, 244, 247

      • foreign-owned banks 215–16, 243, 257

      • household lending 217–18, 223–4, 246–7, 259

      • interest rates 217–18, 220, 224, 225, 259

      • macroeconomic background 239

      • nature of credit growth 114

      • policy responses 99, 134, 220–6

        • and currency mismatches 220–3

        • measures taken by NBR 221

        • monetary policy 225–6, 245

        • options 259

        • and sustainability 223–5

      • underlying fundamentals of credit growth 215–17

    • Russian financial crisis (1998) 175–6, 192

    • Savings and Loans crisis (USA) (1980s) 138

    • Scandinavian banking crises (1990s) 254

    • Schadler, S. 50

    • Schnatz, B. 78

    • seasoned equity offerings (SEOs) 17

    • Serbia

      • foreign-owned banks 275

      • nature of credit growth 114

      • policy responses 99, 135

    • Shin, Y. 77

    • Slovakia 229–35

      • bank privatization 229, 231

      • bank supervision 233–5

      • determinants of credit growth 231–2

      • excessive credit growth 61

      • foreign currency lending 72, 230

      • foreign-owned banks 7, 231, 275

      • household lending 17, 70, 229–30, 231, 232–3, 234–5

      • interest rates 230, 232, 233, 235

      • nature of credit growth 229–30

      • policy responses, measures taken by supervisory authority 233–5

      • risks from credit growth 232–3

    • Slovenia

      • credit-to-GDP ratio 54, 55

      • equilibrium credit-to-GDP ratios 79, 81

      • and equity financing 19

      • excessive credit growth 56, 58, 61, 75

      • exchange rate regime 59, 60

      • and foreign currency lending 72

      • foreign-owned banks 275

      • household lending 17, 70

      • nature of credit growth 114

    • Smith, R. 77

    • Šonje, V. 155

    • Spain 312–18

      • credit growth

        • consequences for financial stability 316–17, 318

        • explanatory factors 312–15

        • macroeconomic consequences 315–16, 318

      • and EMU entry 314, 318

      • financial liberalization 314–15, 318

      • interest rates 314–15, 316

      • and labour market reforms 314

      • policy responses 135

    • surveillance 3–4

    • System of European Central Banks 294

    • Tobin’s q 194, 196

    • trade balance 81, 250, 251–3

    • Turkey 22, 36, 275

      • financial crisis (1997) 26

    • Ukraine 3

      • bank privatization 243, 245, 246, 247

      • bank supervision 244, 246, 259–60

      • credit boom 236–51, 254–60

      • credit-to-GDP ratio 257

      • foreign currency lending 244, 247

      • household lending 246–7

      • macroeconomic background 239

      • nature of credit growth 114

      • policy responses 99, 136

        • options 259–60

    • Unicredito 280

    • vestor error correction model (VECM) 50

    • VILSE 194

    • Vladkova-Hollar, I. 74

    • Vonnák, B. 75

    • Vujšić, B. 155

    • Zochowski, D. 34

    • Zumer, T. 77

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