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Assessing and Managing Rapid Credit Growth and the Role of Supervisory and Prudential Policies
Author: Ceyla Pazarbasioglu, Miss Gudrun Johnsen, Mr. Paul Louis Ceriel Hilbers, and Ms. Inci Ötker
Series:
IMF Working Papers
Volume/Issue:
Volume 2005: Issue 151
Language:
English
Publication Date:
01 Jul 2005
DOI:
https://doi.org/10.5089/9781451861709.001
ISBN:
9781451861709
ISSN:
1018-5941
Pages:
58
Keywords:
WP; credit growth; CEE country; credit boom; interest rate; private sector; financial stability; supervisory and prudential policies; lending boom; loan portfolio; boom episode; rate spread; credit demand; credit quality; composition of credit; credit growth process; boom period; credit culture; Credit; Credit booms; Bank credit; Loans; Credit risk; Eastern Europe
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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 reviews trends in bank lending to the private sector, with a particular focus on Central and Eastern European countries, and finds that rapid growth of private sector credit continues to be a key challenge for most of these countries. The paper discusses possible implications for economic and financial stability and the policy options available to counter and reduce these risks. It argues that the authorities will need to focus on the implications for both the macro economy and the financial system and, depending on their assessment, may need a comprehensive policy response comprising a mix of macro and prudential policies. In particular where there are limitations to the effective use of monetary and fiscal measures, supervisory and prudential policy responses will have a key role in addressing financial stability concerns.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund