Countries in Central, Eastern, and Southeastern Europe (CESEE) experienced a credit boom-bust cycle in the last decade. This paper analyzes the roles of demand and supply factors in explaining this credit cycle. Our analysis first focuses on a large sample of bank-level data on credit growth for the entire CESEE region. We complement this analysis by five case studies (Latvia, Lithuania, Montenegro, Poland, and Romania). Our results of the panel data analysis indicate that supply factors, on average and relative to demand factors, gained in importance in explaining credit growth in the post-crisis period. In the case studies, we find a similar result for Lithuania and Montenegro, but the other three case studies point to the fact that country experiences were heterogeneous.Summary Statistics of Data 1/ Country Domestic banks Foreign banks Total Country Domestic banks Foreign banks Total Albania 10 ... 149 Turkey 66 59 125 Lithuania 44 46 90 Ukraine 167 103 270 Total 1105 1310 2415 Sources: Bankccope and IMF staff estimates. ... 988 99.8 134.5 0.0 812.4 Parent bank home country CDS spreads 1/Summary statistics of parent bank variables are only reported foranbsp;...
|Title||:||Does Supply or Demand Drive the Credit Cycle? Evidence from Central, Eastern, and Southeastern Europe|
|Author||:||Greetje Everaert, Ms. Natasha Xingyuan Che, Ms. Nan Geng, Bertrand Gruss, Gregorio Impavido, Yinqiu Lu, Christian Saborowski, Jérôme Vandenbussche, Li Zeng|
|Publisher||:||International Monetary Fund - 2015-01-23|