Fast Credit Expansion in Central and Eastern Europe: Catching-up, Sustainable Financial Deepening, or Bubble?

  • Peter Backé
  • Balázs Égert
  • Tina Zumer
Chapter
Part of the Procyclicality of Financial Systems in Asia book series (IMF)

Abstract

In recent years, most Central, Eastern, and South-eastern European (CEE) countries have recorded rapid rates of growth of banking system credit and, consequently, sizable increases in the ratio of credit to GDP. Not surprisingly, therefore, the assessment and the implications of credit expansion have become a key policy issue across the CEE region. In particular, the question arises whether or not the observed credit expansion can be viewed as excessive, that is, disconnected from economic fundamentals, or whether it reflects catching-up effects due to low initial credit-to-GDP ratios and sustainable financial deepening.

Keywords

Euro Area Transition Economy Real Interest Rate Foreign Currency European Central Bank 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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Copyright information

© Peter Backé, Balázs Égert, and Tina Zumer 2007

Authors and Affiliations

  • Peter Backé
  • Balázs Égert
  • Tina Zumer

There are no affiliations available

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