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Bank Credit During the 2008 Financial Crisis: A Cross-Country Comparison
Author: Mr. Ari Aisen and Michael Franken
Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 047
Language:
English
Publication Date:
01 Feb 2010
DOI:
https://doi.org/10.5089/9781451963120.001
ISBN:
9781451963120
ISSN:
1018-5941
Pages:
26
Keywords:
WP; crisis; bank credit growth; Bank credit; credit boom; bust cycles; monetary policy; money market rate; post crisis; return on equity; external shock; Credit; Credit booms; Money markets; Global financial crisis of 2008-2009; Asia and Pacific; Europe; Global
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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 empirically estimates the main determinants of bank credit growth during the 2008 financial crisis. Using a sample covering over 80 countries, this paper finds that larger bank credit booms prior to the crisis and lower GDP growth of trading partners are among the most important determinants of the post-crisis bank credit slowdown. Structural variables such as financial depth and integration were also relevant. Finally, countercyclical monetary policy and liquidity played a critical role in alleviating bank credit contraction after the 2008 financial crisis, suggesting that countries should pursue appropriate institutional and macroeconomic frameworks conducive to countercyclical monetary policies.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund