Credit Growth, Bank Soundness and Financial Fragility

Saibal Ghosh

South Asia Economic Journal, 2010, vol. 11, issue 1, 69-98

Abstract: Using data on Indian banks for 1996–2008, the article examines the interconnection among credit growth, bank soundness and financial fragility. The analysis appears to indicate that higher credit growth amplifies bank fragility. Besides, the results point to the fact that sounder banks increase loan supply. Coming to bank ownership, the evidence testifies that credit growth has been rapid in State-owned and de novo private banks. In terms of policy implications, the analysis appears to suggest the need for giving priority to risk-based supervision as a way to contain the potential risks associated with rapid credit growth.

Keywords: Banking; Credit Growth; Z-score; Non-performing Loans; India; JEL: G21; JEL: G24; JEL: P52 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/139156141001100105 (text/html)

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:sae:soueco:v:11:y:2010:i:1:p:69-98

DOI: 10.1177/139156141001100105

Access Statistics for this article

More articles in South Asia Economic Journal from Institute of Policy Studies of Sri Lanka
Bibliographic data for series maintained by SAGE Publications ().