Bank Credit During the 2008 Financial Crisis: A Cross-Country Comparison

26 Pages Posted: 2 Mar 2010

See all articles by Ari Aisen

Ari Aisen

International Monetary Fund (IMF) - Asia and Pacific Department; Central Bank of Chile

Michael Franken

Central Bank of Chile

Date Written: February 2010

Abstract

This paper empirically estimates the main determinants of bank credit growth during the 2008 financial crisis. Using a sample covering over 80 countries, this paper finds that larger bank credit booms prior to the crisis and lower GDP growth of trading partners are among the most important determinants of the post-crisis bank credit slowdown. Structural variables such as financial depth and integration were also relevant. Finally, countercyclical monetary policy and liquidity played a critical role in alleviating bank credit contraction after the 2008 financial crisis, suggesting that countries should pursue appropriate institutional and macroeconomic frameworks conducive to countercyclical monetary policies.

Keywords: Bank credit, Banking systems, Business cycles, Credit expansion, Cross country analysis, Economic growth, Economic integration, Economic models, Financial crisis, Global Financial Crisis 2008-2009, Liquidity, Monetary policy

Suggested Citation

Aisen, Ari and Franken, Michael, Bank Credit During the 2008 Financial Crisis: A Cross-Country Comparison (February 2010). IMF Working Papers, Vol. , pp. 1-25, 2010. Available at SSRN: https://ssrn.com/abstract=1562415

Ari Aisen (Contact Author)

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Central Bank of Chile ( email )

Publicaciones
Huerfanos 1185
Santiago
Chile

Michael Franken

Central Bank of Chile ( email )

Publicaciones
Huerfanos 1185
Santiago
Chile

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