Assessing the Sustainability of Credit Growth: the Case of Central and Eastern European Countries

Virginie Coudert () and Cyril Pouvelle

Working Papers from CEPII research center

Abstract: Strong credit growth rates in transition countries may result from a normal catching-up process in a framework of financial development. However, as elsewhere, they can also pertain to a “credit boom”, paving the way to future “credit crunches”. We try to disentangle these two types of situation for the central and eastern European countries (CEECs) by applying a number of methods. First, we consider the gap between current credit and its longterm trend and we find some signs of credit booms, in several CEECs in 2005-2007. Second, we assess the “normal” growth of credit with regard to fundamentals through econometric estimations. Credit growth is also shown to have been excessive in several countries just before the 2008-2009 financial crisis.

Keywords: CREDIT BOOM; TRANSITION; FINANCIAL DEVELOPMENT (search for similar items in EconPapers)
JEL-codes: E30 E51 G21 (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-fdg, nep-mac and nep-tra
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Related works:
Journal Article: Assessing the Sustainability of Credit Growth: The case of Central and Eastern European Countries (2010)
Working Paper: Assessing the Sustainability of Credit Growth: The case of Central and Eastern European Countries (2010)
Working Paper: Assessing the Sustainability of Credit Growth: The case of Central and Eastern European Countries (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2009-33

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