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Objective: This study examines the influence of economic policy uncertainty in countries with the largest capital investments in Indonesia, such as Singapore, China, Hong Kong, Japan, the United States, Korea, and the United Kingdom, on the credit growth of commercial banks in Indonesia. Design/Methods/Approach: The sample of this study is all commercial banks in Indonesia from January 2011 to December 2022. This study uses a quantitative approach, using monthly aggregate data on credit growth of commercial banks in Indonesia and economic policy uncertainty data for each country. Hence, the number of observations in this study amounts to 144. This study uses multiple linear regression with the EViews 12 analysis tool. Findings: The findings in this study show that the influence of economic policy uncertainty in the country with the largest capital investment in Indonesia has various influences. Of the several countries that were observed in the study, Japan was one of the countries that had a significant negative impact on the growth of commercial bank credit in Indonesia. Originality/Value: This study complements several previous studies regarding the impact of economic policy uncertainty on Indonesia's micro and macro economy. Studies regarding the impact of economic policy uncertainty on Indonesia's banking credit growth are still limited. Practical/Policy implication: The findings of this study can be used as a reference for banking managers when making decisions such as credit portfolio diversification. By spreading exposure to various sectors and industries, banks can reduce risks related to economic uncertainty in specific sectors. Banking managers need to design products and services that are more creative and adaptive to help banks remain competitive and attract customer interest amidst an uncertain economic situation.

Credit growth related to production, consumption, investment, exports, and imports is considered crucial for economic growth. The Covid-19 pandemic has had a major impact on the economies of countries in the world, as seen from a significant decline in credit growth. This study examines the effects of Economic Growth, Exchange Rate, Inflation, BI Rate, Third Party Funds (TPF), and Non-Performing Loans (NPL) on Banking Credit Growth in Indonesia during the COVID-19 Pandemic Period and regulations issued during that period. Analysis using multiple linear regression method using EViews 10 software with data type in the form of time series. The results of this study showed that only TPF growth had a significant effect. Simultaneously, the variables of Economic Growth, Exchange Rate, Inflation, BI Rate, NPL and Deposit Growth have a significant effect. The most dominant influencing variable is deposit growth.

Objective: This study examines the influence of economic policy uncertainty in countries with the largest capital investments in Indonesia, such as Singapore, China, Hong Kong, Japan, the United States, Korea, and the United Kingdom, on the credit growth of commercial banks in Indonesia. Design/Methods/Approach: The sample of this study is all commercial banks in Indonesia from January 2011 to December 2022. This study uses a quantitative approach, using monthly aggregate data on credit growth of commercial banks in Indonesia and economic policy uncertainty data for each country. Hence, the number of observations in this study amounts to 144. This study uses multiple linear regression with the EViews 12 analysis tool. Findings: The findings in this study show that the influence of economic policy uncertainty in the country with the largest capital investment in Indonesia has various influences. Of the several countries that were observed in the study, Japan was one of the countries that had a significant negative impact on the growth of commercial bank credit in Indonesia. Originality/Value: This study complements several previous studies regarding the impact of economic policy uncertainty on Indonesia's micro and macro economy. Studies regarding the impact of economic policy uncertainty on Indonesia's banking credit growth are still limited. Practical/Policy implication: The findings of this study can be used as a reference for banking managers when making decisions such as credit portfolio diversification. By spreading exposure to various sectors and industries, banks can reduce risks related to economic uncertainty in specific sectors. Banking managers need to design products and services that are more creative and adaptive to help banks remain competitive and attract customer interest amidst an uncertain economic situation. [ABSTRACT FROM AUTHOR]

This study evaluates credit growth and analyzes factors affecting credit growth of Vietnamese commercial banks in the context of the Covid-19 pandemic. The study uses financial statement data from 25 Vietnamese commercial banks during the period from the 1st quarter of 2018 to the 3rd quarter of 2021. The credit growth of the banks fluctuated and tended to decrease during the Covid-19 pandemic, especially from the beginning of 2021 to present when Vietnam faced significant outbreaks. The results from applying random effects model show that the Covid-19 pandemic had a negative impact on credit growth. In addition, financial capability also negatively affected credit growth. In contrast, an increase of capital mobilization ability, profit rate, and profit margin led to the growth of credit.

The turbulences that banking systems confronted over the past decades emphasized the importance of a sound macroprudential policy. Therefore, our study analyses the use and the types of macroprudential tools adopted by the authorities, in Central and Eastern European countries, from 2000 to 2018. Our findings reveal a degree of asymmetry within the regulatory framework. More exactly, the frequency, but also the nature of prudential instruments was not symmetrical in the Central and Eastern European countries. The heterogeneity also stands out from a time-varying perspective. We attribute this pattern to the different levels of financial stress that banking systems have been subjected to. Generally, we notice that the macroprudential tools aimed at taming the financial cycle

This study examines the nexus between credit expansion and the financial sustainability of microfinance institutions (MFIs) in Sub-Saharan Africa (SSA). The study also examines the interaction effects of credit expansion and interest rate/portfolio quality on MFI sustainability. The study relies on panel dataset of 136 MFIs across 31 SSA countries covering the year 2004 to 2018 and applies the Arellano-Bover/Blundell-Bond two-step Generalized Method of Moments (GMM) Windmeijer bias-corrected standard errors to analyze the data. The results establish that credit expansion matters in MFI financial sustainability. Specifically, the study uncovers that while the size of the loan portfolio and loan intensity are positively associated with MFI sustainability, the economic significance of loan intensity is higher. On the other hand, the other credit expansion proxy “credit growth” does not predict the sustainability of MFIs. The results also reveal that the loan intensity and potfolio at risk have interaction effects on MFI sustainability. However, the study fails to support an asymmetric effect of credit expansion on financial sustainability depending on the interest rate charged on loans. The study uses three proxies for credit expansion and gives useful insights for policymakers and/or MFI managers that loan intensity should be the main target of MFIs if the goal is to attain financial self-sufficiency. The study also examines the interaction effects of credit expansion and interest rate/portfolio quality on MFI sustainability and sheds light on what is expected from MFI managers to expand credit access to the poor without compromising sustainability.

This article examines the effect of institutional quality on the credit growth of Microfinance Institutions (MFIs) in sub-Saharan Africa (SSA). This paper uses a panel dataset of 131 MFIs across 31 SSA countries spanning 2004–2018 and applies the Arellano-Bover/Blundell-Bond two-step Generalized Method of Moments (GMM) Windmeijer bias-corrected standard errors to estimate the parameters. The study reveals that institutional quality is an important factor in the credit growth of MFIs. We uncover new and interesting evidence that political stability “sands the wheels” of credit growth of MFIs, implying that MFIs operating in more politically stable countries tend to be more risk averse and limit credit supply. On the other hand, the rule of law “greases the wheels” of credit growth of MFIs, suggesting that MFIs expand credits more when the rule of law is stronger. We also uncover that credit growth is linked to regulatory quality/government effectiveness positively, but not statistically significant. Similarly, voice and accountability and control of corruption do not have significant effects on MFI credit growth. The findings have several useful implications as discussed in the paper.

The purpose of this study is twofold: First, we examine the capital adjustment process using a partial adjustment framework and second, we test whether capitalization impacts the credit growth of microfinance institutions (MFIs) through the deviation (i.e. the divergence between the actual capital ratio and the implicit long-run target capital). To this end, we use an unbalanced panel dataset of 127 MFIs across 31 countries in Sub-Saharan Africa (SSA) during 2004–2014. We apply the Arellano-Bover/Blundell-Bond two-step Generalized Method of Moments (GMM) Windmeijer bias-corrected standard errors for estimating both the capital and lending models. Standard errors for the long-run effects in the capital equation are approximated with the Delta method. Our findings reveal that profitability contributes to the capitalization of MFIs, whereas portfolio risk and liquidity are negatively associated with MFI capital. We also find that large-scale MFIs have lower capitalization, while small-scale MFIs have higher capitalization relative to medium scale MFIs consistent with the “too big to fail” hypothesis. Nevertheless, we uncover that the legal status of MFIs, deposit growth and economic growth have no direct effects on capitalization. The findings also confirm that there is a capital adjustment difficulty in the microfinance industry in SSA. The constant of the model is also statistically significant and has the highest economic significance suggesting that the capital ratio fluctuates mainly around a firm-specific unobserved time-invariant component. The findings, however, fail to support the hypothesis that capitalization impacts MFI lending behavior through the deviation.

The purpose of this study is twofold: First, we examine the capital adjustment process using a partial adjustment framework and second, we test whether capitalization impacts the credit growth of microfinance institutions (MFIs) through the deviation (i.e. the divergence between the actual capital ratio and the implicit long-run target capital). To this end, we use an unbalanced panel dataset of 127 MFIs across 31 countries in Sub-Saharan Africa (SSA) during 2004–2014. We apply the Arellano-Bover/Blundell-Bond two-step Generalized Method of Moments (GMM) Windmeijer bias-corrected standard errors for estimating both the capital and lending models. Standard errors for the long-run effects in the capital equation are approximated with the Delta method. Our findings reveal that profitability contributes to the capitalization of MFIs, whereas portfolio risk and liquidity are negatively associated with MFI capital. We also find that large-scale MFIs have lower capitalization, while small-scale MFIs have higher capitalization relative to medium scale MFIs consistent with the "too big to fail" hypothesis. Nevertheless, we uncover that the legal status of MFIs, deposit growth and economic growth have no direct effects on capitalization. The findings also confirm that there is a capital adjustment difficulty in the microfinance industry in SSA. The constant of the model is also statistically significant and has the highest economic significance suggesting that the capital ratio fluctuates mainly around a firm-specific unobserved time-invariant component. The findings, however, fail to support the hypothesis that capitalization impacts MFI lending behavior through the deviation. [ABSTRACT FROM AUTHOR]

This article investigates the determinants of non-performing loans for a panel of EEC countries and the implications for the real economy, covering the period 2005-2017. Among the determinants, the paper proposes macroeconomic factors, banking sector variables, and cost and governance indicators. Additionally, the paper explores the extensive use of macroprudential measures in these countries. Using a panel with fixed effects and a dynamic GMM estimator, the results support the existing findings that adverse macroeconomic developments are generally associated with higher non-performing loans, while increases in NPLs have a rather transitory effect on the real economy and credit. NPL ratios increase if macroeconomic conditions deteriorate, while an improvement in the government effectiveness reduces them. A more profitable and better capitalized banking sector generally leads to lower NPLs. Moreover, countries with higher past credit growth rates witnessed higher NPLs in the periods that followed. These results support the use of macroprudential measures for increasing the resilience of borrowers, such as limits on the indebtedness level (such as debt service-to-income, DSTI or loan-to-value, LTV caps), as tools to temper the credit cycle.

The main function of banks is to facilitate the better functioning of lending activity, helping to improve efficiency and rational distribution of resources between different entities. If credit is used to purchase productive resources, this will help economic growth. The overall development of credits is usually based on a combination of factors that simultaneously impact the demand and supply of bank credit. Using a qualitative and quantitative analysis, the main objective of this paper is to establish the analysis of the evolution and determinants of credit activities, especially of the factors that have an impact on credit growth. Also, this paper will analyze the effects that the current pandemic has brought to the European banking sector in general and in particular to the credit activity. The results showed that economic growth, credit quality, financial intermediation rate, along with foreign and domestic funding sources are the main determinants of credit growth.

This study purposes to discover the interactive relationship between credit growth and profitability and to examine factors that affect the credit growth and profitability of people's credit funds (PCFs). After regression analysis on a set of panel data from 2013 to 2018 on 24 selected PCFs, it appeared that deposit growth and loan-to-deposit ratio had positive relationships with credit growth, and capital adequacy ratio and profitability had negative relationships with credit growth of PCFs. The age of PCFs has a positive relationship with profitability, while the credit growth, debt-to-equity ratio, non-performing loan ratio, economic growth and inflation have negative relationships with profitability of PCFs. The study found the credit growth and profitability have relationships with each other in a contrary trend. Based on the findings the study proposes policy measures that could be implemented by the managers to increase PCFs’ credit growth rate and profitability.

Copyright of Economy & Market Communication Review / Casopis za Ekonomiju i Trzisne Komunikacije is the property of Pan-European University Apeiron and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In this study, we analyze the effects of macroprudential measures on bank lending in the European Union. We develop several dedicated macroprudential policy indices reflecting different policy actions taken by the authorities in individual member countries, with the aim to affect credit activity in national banking sectors. In our empirical model, we measure responsiveness of gross loans in banks to selected macroprudential policy indices, taking into account a set of bank level and macroeconomic control variables. We use the Fitch Connect bank level dataset with financial statements for 3434 European banks with 18,616 observations and macroeconomic data provided by the World Bank and IMF statistics covering the period between 2000 and 2017. Information on the use of macroprudential instruments is taken from a new macroprudential policy database, MaPPED, gathered and published by European Central Bank, where we were able to extract the information on both timing and the direction of use of the macroprudential policy instruments. Our findings show that macroprudential instruments can be used effectively for regulatory modulation of credit activity in banks, with some fluctuations in the level of the effectiveness through the business cycles. Therefore, in loosening cycles, macroprudential measures are found to be strongly and positively associated with bank lending. On the other side, tightening actions are found to have a downward effect on bank lending, while these effects are less pronounced. These results are of great importance in the current crisis arising from the impact of COVID-19, as policymakers are trying to support the economy by easing macroprudential regulatory constraints to ensure lending to the real sector. [ABSTRACT FROM AUTHOR]

In this study, we analyze the effects of macroprudential measures on bank lending in the European Union. We develop several dedicated macroprudential policy indices reflecting different policy actions taken by the authorities in individual member countries, with the aim to affect credit activity in national banking sectors. In our empirical model, we measure responsiveness of gross loans in banks to selected macroprudential policy indices, taking into account a set of bank level and macroeconomic control variables. We use the Fitch Connect bank level dataset with financial statements for 3,434 European banks with 18,616 observations and macroeconomic data provided by the World Bank and IMF statistics covering the period between 2000 and 2017. Information on the use of macroprudential instruments is taken from a new macroprudential policy database, MaPPED, gathered and published by European Central Bank, where we were able to extract the information on both timing and the direction of use of the macroprudential policy instruments. Our findings show that macroprudential instruments can be used effectively for regulatory modulation of credit activity in banks, with some fluctuations in the level of the effectiveness through the business cycles. Therefore, in loosening cycles, macroprudential measures are found to be strongly and positively associated with bank lending. On the other side, tightening actions are found to have a downward effect on bank lending, while these effects are less pronounced. These results are of great importance in the current crisis arising from the impact of COVID-19, as policymakers are trying to support the economy by easing macroprudential regulatory constraints to ensure lending to the real sector.

Credit is an economic category and is also a product of the commodity economy, which exists through many socio-economic forms to promote economic growth. Therefore, the objective of this paper is to analyst, compare and forecast domestic credit growth in Vietnam's and China's economy. Thus, the paper is applied by a method of an autoregressive integrated moving average (ARIMA) model. This model is fitted to time series data both to better understand the data and to forecast future points in the series. Hereby, the methodology is selected by Vietnam's bestfit model ARIMA (2,3,1) and China's best-fit model ARIMA (2,3,5). Analytical data are collected from 1996 to 2017, the sample fitted the model and is statistically significant. The result show the forecast result for next years. The Vietnamese and Chinese economy are the open economies and have domestic credit greatly contributed to economic growth. These results are the basis for policymakers to have a general view and define the impact of domestic credit growth on GDP between the two countries.

International comparisons reveal that – even controlling for a host of explanatory factors – credit depth is exceptionally low in Mexico. Using panel data methods linking credit growth and fundamentals, this paper estimates a long-term gap between actual and expected credit of about 40 percent of GDP. Possible explanations include the history of banking crises, the large informal sector and an inefficient legal system. Using a disequilibrium regression approach, this paper also finds that supply factors are particularly important as determinants of credit in Mexico. Recent financial reforms address many of the supply constraints, but their success will depend on implementation. The main challenge going forward will be to support financial deepening, while limiting risks to financial stability.

In this paper, endogenous and exogenous factors that affect the credit growth rate of some Western Balkan countries (Bosnia and Herzegovina, Croatia and Serbia) and the credit policy in Turkey will be investigated through a multiple regression analysis. The credit growth rate will be used as the dependent variable while the rate of the non-performing loans along with the growth rate of the deposit, the return of equity and the real growth rate of the gross domestic product will be used as independent variables. In this paper the STATA 13.0 software package will be used. This data analysis will include a quarterly basis data for the period: 2007q1 – 2017q2 due to its higher significance. The result of the regression analysis showed that there is a reverse relationship between the rate of the non-performing loans and the credit growth rate for all the observed countries. The high share of problematic loans in total loans relatively reflects in a negative way the overall tendency of the banks towards taking risks and credit growth. It reduces the profitability of the banking sector and increases the systemic risk as well. The basic results of the regression analysis also showed a positive relationship between economic growth and the credit growth of banks. On the one hand, the economic growth of the region insufficiently follows the credit growth due to the stagnation of the real sector, and the recovery of the economy on the other hand. Similarly, there is a positive relationship between the growth rate of the deposits and credit growth, since the deposits sources are the basis for performing credit nomination. Except for Croatia where a negative correlation was recorded, there is a positive relationship in terms of the return on equity and credit growth.

This paper extends the available datasets on the use of macroprudential policies in CEE countries, and provides an econometric assessment of the effectiveness of these policies in mitigating financial stability risks associated with excessive credit growth before the global financial crisis. The model results imply that macroprudential policies were more effective in slowing credit to households than credit to the non-financial corporate sector, mainly because the latter had access to nonbank and cross-border credit in addition to domestic bank credit.

This paper presents a detailed account of the rich set of macroprudential measures (MPPs) implemented in Bulgaria, Croatia, Romania, and Serbia during their synchronized boom and bust cycles in 2002–12, and assesses their effectiveness in managing credit growth. Only strong MPPs helped contain domestic credit growth during the boom years, but circumvention via direct external borrowing offset their effectiveness to a large extent. MPPs taken during the bust had no discernible impact. The paper concludes that (i) proper calibration of MPPs is of the essence; (ii) only strong, broad-based MPPs can contain credit booms; (iii) econometric studies of macroprudential policy effectiveness should focus on concrete policy measures rather than on instruments use; and (iv) in so doing should allow for possible non-linear and state-contingent effects.

This article investigates the determinants of non-performing loans for a panel of EEC countries and the implications for the real economy, covering the period 2005-2017. Among the determinants, the paper proposes macroeconomic factors, banking sector variables, and cost and governance indicators. Additionally, the paper explores the extensive use of macroprudential measures in these countries. Using a panel with fixed effects and a dynamic GMM estimator, the results support the existing findings that adverse macroeconomic developments are generally associated with higher non-performing loans, while increases in NPLs have a rather transitory effect on the real economy and credit. NPL ratios increase if macroeconomic conditions deteriorate, while an improvement in the government effectiveness reduces them. A more profitable and better capitalized banking sector generally leads to lower NPLs. Moreover, countries with higher past credit growth rates witnessed higher NPLs in the periods that followed. These results support the use of macroprudential measures for increasing the resilience of borrowers, such as limits on the indebtedness level (such as debt service-to-income, DSTI or loan-to-value, LTV caps), as tools to temper the credit cycle. [ABSTRACT FROM AUTHOR]

The main function of banks is to facilitate the better functioning of lending activity, helping to improve efficiency and rational distribution of resources between different entities. If credit is used to purchase productive resources, this will help economic growth. The overall development of credits is usually based on a combination of factors that simultaneously impact the demand and supply of bank credit. Using a qualitative and quantitative analysis, the main objective of this paper is to establish the analysis of the evolution and determinants of credit activities, especially of the factors that have an impact on credit growth. Also, this paper will analyze the effects that the current pandemic has brought to the European banking sector in general and in particular to the credit activity. The results showed that economic growth, credit quality, financial intermediation rate, along with foreign and domestic funding sources are the main determinants of credit growth. [ABSTRACT FROM AUTHOR]

Copyright of Research Papers of the Wroclaw University of Economics / Prace Naukowe Uniwersytetu Ekonomicznego we Wroclawiu is the property of Uniwersytet Ekonomiczny we Wroclawiu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The Nordic financial sectors were challenged during the early 1990s and in 2008. The crises were costly, with losses in terms of foregone GDP accumulating to, in some cases, two years of economic output (GDP). High credit growth and real estate booms, preceded by financial liberalizations, caused the crises. There were many similarities across the Nordics, but also some important differences. Currently, credit growth is low and banks are well capitalized. Traditional indicators of financial crises are not flashing red. On the other hand, house prices and household debt levels are elevated. Risks resulting from low interest rates are also discussed. [ABSTRACT FROM AUTHOR]

Although considerable research has focused on the determinants of credit to the private sector, the issue still remains controversial, particularly with respect to the role of foreign banks in emerging markets. This study sought to understand the factors that affect lending of commercial bank loans both in form of foreign and local loans. It used panel data methods on quarterly bank-specific data covering the period from 2000 to 2013. In general, the results reveal that the ownership structure, housing variable and the size of the bank are the main determinants of aggregate commercial bank lending. This conclusion is maintained even when the determinants of foreign loans and local loans are specifically examined separately. However, the role of the liquidity measure is in not consistent in the different specifications while the role of interest rates is largely in line with expectation in most of the specifications. Implicitly, the results seem to suggest a need for mergers of small banks, policy focus on incentives for more local bank ownership and continued efforts on minimization of interest rate spread, which not only promote mortgage financing and home ownership, but also overall credit growth.

This paper studies how the process of reallocation of credit across firms behaves before and after financial crises. Applying the methodology typically used for measuring job reallocation, we track credit reallocation across Korean firms for over three decades (1980–2012). The credit boom preceding the 1997 crisis featured a slowdown of credit reallocation. After the crisis and the associated reforms, the creditless recovery (deleveraging) masked a dramatic intensification and increased procyclicality of credit reallocation. The findings suggest that the intensification of reallocation was efficiency‐enhancing. [ABSTRACT FROM AUTHOR]

We estimate credit and fiscal multipliers in China, using subnational political cycles as a source of exogenous variation. The tenure of the provincial party secretary, interacted with the credit and fiscal expenditure used in other provinces, instruments for provincial credit and government expenditure growth. We find a fiscal multiplier of 0.75 in 2001-2008, which increased to 1.2 in 2010- 2015, consistent with higher multipliers in a slower economy. At the same time, a credit multiplier of 0.2 in 2001-2008 declined to close to zero in 2010-2015, consistent with credit saturation and credit misallocation. Our results suggest that credit expansion cannot further support economic growth in China. The flip side is that lower credit growth is also unlikely to disrupt output growth. Fiscal policy is powerful, and can cushion the macroeconomic adjustment to lower credit intensity. [ABSTRACT FROM AUTHOR]

International comparisons reveal that - even controlling for a host of explanatory factors - credit depth is exceptionally low in Mexico. Using panel data methods linking credit growth and fundamentals, this paper estimates a long-term gap between actual and expected credit of about 40 percent of GDP. Possible explanations include the history of banking crises, the large informal sector and an inefficient legal system. Using a disequilibrium regression approach, this paper also finds that supply factors are particularly important as determinants of credit in Mexico. Recent financial reforms address many of the supply constraints, but their success will depend on implementation. The main challenge going forward will be to support financial deepening, while limiting risks to financial stability. [ABSTRACT FROM AUTHOR]

The predominant role of cross border financial flows for macroeconomic and financial stability has imposed complex policy trade-offs for emerging economies, especially after the global financial crisis. This note provides a brief account of the macroprudential policy approach adopted in Turkey between the years 2011 and 2015, a period when global capital flows exhibited unprecedented volatility. Special emphasis is put on the use of monetary policy tools for macroprudential purposes. We first highlight the particular role of external flows and the associated tradeoffs in designing the monetary policy and macroprudential policy framework. Next, we describe the policy implementation by the central bank and the regulatory authorities, and evaluate the consequent outcomes. Our analysis suggests that macroprudential policies have improved external balances, dampened financial amplification channels, and reduced the sensitivity of the Turkish economy to capital flows.

Most CESEE countries had an impressive credit growth prior to the outbreak of the financial crisis in 2008. Nevertheless, that experience has taught us that the strong expansion of private sector credit must not be ignored. In an attempt to investigate whether the rapid credit growth was a result of the catching-up process or was a risky process with well-known consequences, we performed empirical analysis by applying statistical (HP filter) and econometric (pooled OLS, fixed effect OLS, and PMG) approaches. The empirical results of both out-of-sample and in-sample approaches suggest that in the pre-crisis period excessive credit growth in terms of higher actual than estimated credit growth was recorded for the majority of the countries observed. Compared to the out of-sample approach, in-sample estimates, which turned out to be more reliable, indicate that the pre-crisis growth was less pronounced and that over the post-crisis period actual credit growth fluctuated around the estimated growth, pointing to the fact that the former was in line with movements in its fitted values.

In this paper, endogenous and exogenous factors that affect the credit growth rate of some Western Balkan countries (Bosnia and Herzegovina, Croatia and Serbia) and the credit policy in Turkey will be investigated through a multiple regression analysis. The credit growth rate will be used as the dependent variable while the rate of the nonperforming loans along with the growth rate of the deposit, the return of equity and the real growth rate of the gross domestic product will be used as independent variables. In this paper the STATA 13.0 software package will be used. This data analysis will include a quarterly basis data for the period: 2007q1 - 2017q2 due to its higher significance. The result of the regression analysis showed that there is a reverse relationship between the rate of the non-performing loans and the credit growth rate for all the observed countries. The high share of problematic loans in total loans relatively reflects in a negative way the overall tendency of the banks towards taking risks and credit growth. It reduces the profitability of the banking sector and increases the systemic risk as well. The basic results of the regression analysis also showed a positive relationship between economic growth and the credit growth of banks. On the one hand, the economic growth of the region insufficiently follows the credit growth due to the stagnation of the real sector, and the recovery of the economy on the other hand. Similarly, there is a positive relationship between the growth rate of the deposits and credit growth, since the deposits sources are the basis for performing credit nomination. Except for Croatia where a negative correlation was recorded, there is a positive relationship in terms of the return on equity and credit growth. [ABSTRACT FROM AUTHOR]

This paper investigates the determinants of credit growth in the private sector across some of the Organization for Economic Cooperation and Development (OECD) countries. The data set covers 24 countries and uses quarterly data over a period from the fourth quarter of 2001 to the fourth quarter of 2013. Panel unit root tests, indicate that the series used are stationary at their first difference form, and cointegration tests indicate that a longterm relationship exists among the series in the panel. Generalized impulse response functions and forecast variance decomposition are analyzed. The results indicate that, in the long-run, the main determinants of bank credit growth for OECD countries are exchange rates, foreign liabilities, money supply, interest rates, inflation, GDP, and fixed capital formation (FCF). The study shows that macroeconomic stability seems to be vital for the flow of credit to the private sector across OECD countries. [ABSTRACT FROM AUTHOR]

In this study, we conduct a panel analysis of Islamic and conventional banks to ascertain whether Islamic banks are able to sustain financing supply and whether its growth is higher than conventional bank lending growth in times of stress. For concreteness, we also assess whether the sustained financing supply of Islamic banks is justified by a concomitant increase in Islamic deposit growth and is not linked to excessive risk taking. Utilizing a panel sample of 25 Islamic banks and 114 conventional banks from 10 dual-banking countries, we observe sustained financing supply by Islamic banks but significant reduction in the lending growth by conventional banks during the crisis period. The results further suggest that the financing growth of Islamic banks is higher than the lending growth of conventional banks during the crisis period. However, we find no clear evidence that the deposit growth of Islamic banks behaves differently during the period. Finally, there is no indication to suggest that Islamic banks exhibit excessive risk taking in times of stress. Our results contribute to the evidence supporting the contributive role of the Islamic banking system to financial and economic stability. [ABSTRACT FROM AUTHOR]

This paper extends the available datasets on the use of macroprudential policies in CEE countries, and provides an econometric assessment of the effectiveness of these policies in mitigating financial stability risks associated with excessive credit growth before the global financial crisis. The model results imply that macroprudential policies were more effective in slowing credit to households than credit to the non-financial corporate sector, mainly because the latter had access to nonbank and cross-border credit in addition to domestic bank credit. [ABSTRACT FROM AUTHOR]

This paper presents a detailed account of the rich set of macroprudential measures (MPPs) implemented in Bulgaria, Croatia, Romania, and Serbia during their synchronized boom and bust cycles in 2002-12, and assesses their effectiveness in managing credit growth. Only strong MPPs helped contain domestic credit growth during the boom years, but circumvention via direct external borrowing offset their effectiveness to a large extent. MPPs taken during the bust had no discernible impact. The paper concludes that (i) proper calibration of MPPs is of the essence; (ii) only strong, broad-based MPPs can contain credit booms; (iii) econometric studies of macroprudential policy effectiveness should focus on concrete policy measures rather than on instruments use; and (iv) in so doing should allow for possible non-linear and state-contingent effects. [ABSTRACT FROM AUTHOR]

• This is the first study to examine the effect of economic dual circulation structure (DCS) on credit growth based on the view of structure of economic domestic and external demand. Findings suggest that DCS significantly reduces credit growth. • With free trade zones' establishment as the instrumental variable and multiple periods DID test approach, the endogenous problem is better solved. • The impact of DCS on credit growth depends on industrial structure and technological innovation level. • Fixed investment is one channel of effect of DCS on credit growth. This paper empirically examines the impact of the economic dual circulation structure (DCS) on credit growth for the first time, thus expanding the existing literature on economic structure and credit growth. Using China's provincial data from 1995 to 2021, findings indicate that DCS significantly reduces credit growth, in areas with high ratio of value-added of service-to-manufacturing or with high technological innovation level, this negative effect become more significant. Additionally, fixed investment is one mechanism of this effect. our research is helpful for understanding China's sustainable economic growth and credit growth. [ABSTRACT FROM AUTHOR]

The growth in consumer non-purpose loans leads to the reduction in BiH current account balance and amplifies the current account deficit. According to regression models, the commercial loan has the same effect on the current account. However, in dynamic VAR models, a commercial loan has, either neutral influence on the current account balance, or contributes to its mild growth. A commercial loan is necessary for BiH economy, because the private sector is the main factor of the economic growth, while a consumer non-purpose loan generates mainly demand for import. When a credit growth is very low, the credit is economic and not free good and additional need for the direct regulation of credit appears, especially in countries with underdeveloped financial market. The share of private companies in the credit distribution is reduced and from the economic point of view, redistribution of loans can be made only at the expense of consumer loans. Additional growth limit on the consumer non-purpose loan, which is composed of 74.2% of total consumer loans, and 34.9% of all bank’s loans (10/2016), is one of the preconditions for the decrease of current account deficit, economic growth and economic development acceleration.

We used a time-series cross-section dataset to test several hypotheses pertaining to the role of macroprudential policy instruments in the management of the financial cycle in advanced open economies. The short-run effects are most significant for caps on loan to value and income (LTV and LTI) and risk weights (RW). The long-run coefficients of credit growth with respect to the indicators of amortisation requirements (Amort) and RW are also significant. The estimation results when house price growth is the dependent variable are consistent with these results. Our findings do not support that Basel III type countercyclical buffer (CCyB) has affected credit growth, and we suggest that the variable is mainly a control in our dataset. In that interpretation, it is interesting that the estimated coefficients of the other instruments are robust with respect to exclusion of CCyB from the empirical models. The main results are also robust to controls in the form of impulse indicator saturation (IIS), which we employed as a novel estimation method for macro panels.

This paper investigates the influence of three types of credit growth on non-performing loans in eleven Central and Eastern European countries during the period from 1999 to 2013. As opposed to previous research on credit risk, we have moved the focus from the usually investigated bank-specific and macroeconomic variables to different types of credit growth from earlier periods. At the same time, the results of this research give answer on the studies before the crisis, which tried to determine the possible consequences of rapid credit growth in the CEE countries. The results indicate that at least two years are necessary for each type of credit growth to increase credit risk. Finally, empirical results confirm the importance of both bank-specific and macroeconomic variables. [ABSTRACT FROM AUTHOR]

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The present paper is a translation of the article published in issue no. 33 (2006) of Financial Studies.