The Role of the Real Exchange Rate in Credit Growth in Central and Eastern European Countries: A Bank-Level Analysis

Michael Frömmel and Murat Midilic ()
Additional contact information
Murat Midilic: Department of Financial Economics, Ghent University

Czech Journal of Economics and Finance (Finance a uver), 2016, vol. 66, issue 5, 426-452

Abstract: This study analyzes the effects of macroeconomic and bank-level variables on the loan growth of banks in Central and Eastern European countries (CEECs) for the period between 1999 and 2010. Differences between private, state, domestic and foreign banks are analyzed by using the ownership structures of banks. We show that, unlike macroeconomic factors and other bank-level variables, leverage growth and equity growth have consistently significant effects on the loans of both domestic and foreign banks. The real exchange rate turns out to be a significant factor only for foreign banks. The latter result is important in understanding the transmission of global shocks to domestic credit. The results are robust to different specifications.

Keywords: credit growth; emerging markets; real exchange rate; leverage (search for similar items in EconPapers)
JEL-codes: F31 G21 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://journal.fsv.cuni.cz/storage/1369_frommel.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:66:y:2016:i:5:p:426-452

Access Statistics for this article

More articles in Czech Journal of Economics and Finance (Finance a uver) from Charles University Prague, Faculty of Social Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().