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Lending Booms, Real Estate Bubbles and the Asian Crisis
Author:
Mr. Abdelhak S Senhadji
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Mr. Charles Collyns
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Series:
IMF Working Papers
Volume/Issue:
Volume 2002: Issue 020
Language:
English
Publication Date:
01 Feb 2002
DOI:
https://doi.org/10.5089/9781451843859.001
ISBN:
9781451843859
ISSN:
1018-5941
Pages:
46
Keywords:
WP; price index; property price; asset price bubbles; financial market; exchange market crisis; rate of return; Lending Booms; Real Estate Bubbles; Asia Crisis; property market; adverse selection; Land prices; Real estate prices; Asset prices; Asset bubbles; Credit; East Asia; Asia and Pacific
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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This paper examines the link between lending booms, asset price cycles, and financial crises across East Asian countries. Both theoretical arguments and empirical evidence support a strong relationship between bank lending and asset price inflation, especially in the real estate market. While asset price bubbles were present in most Asian countries during the 1990s, their subsequent bust has affected countries quite differently. Some countries underwent severe exchange and financial crises, while others were able to weather the storm with much less damage. This experience underlines the importance of a strong bank regulatory system.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund