Cover IMF Working Papers
Bank Credit, Asset Prices and Financial Stability: Evidence From French Banks
Author: Mr. Cyril Pouvelle
Series:
IMF Working Papers
Volume/Issue:
Volume 2012: Issue 103
Language:
English
Publication Date:
01 Apr 2012
DOI:
https://doi.org/10.5089/9781475502930.001
ISBN:
9781475502930
ISSN:
1018-5941
Pages:
40
Keywords:
WP; price; asset price; bank balance; Credit growth; asset prices; financial stability; price growth; bank leverage; growth estimation; bank balance sheet; Credit; Loans; Real estate prices; Bank credit; 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 analyses the effect of asset prices on credit growth in France and tries to disentangle credit demand and supply factors, both for the whole 1993-2010 period and during periods of financial instability. Using bank-level panel data at a quarterly frequency, stock price growth is shown to have a significant effect on lending growth over the whole period, but without credit supply factors being singled out. By contrast, housing price growth has a significant effect during periods of financial instability only, even after controlling for credit demand effects. These results show that credit demand factors do play a large role but also provide evidence of tighter credit constraints on households in financial instability periods.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund