Recent Credit Stagnation in the MENA Region: What to Expect? What Can Be Done?

20 Pages Posted: 1 Feb 2011

See all articles by Adolfo Barajas

Adolfo Barajas

International Monetary Fund (IMF) - Western Hemisphere Department

Ralph Chami

International Monetary Fund (IMF)

Raphael A. Espinoza

International Monetary Fund (IMF)

Heiko Hesse

International Monetary Fund (IMF)

Date Written: September 2010

Abstract

This paper examines the recent credit slowdown among Middle Eastern and North African (MENA) countries from three analytical angles. First, it finds that, similar to other regions and to its past history, a credit boom preceded the current slowdown, and that a protracted period of sluggish growth is likely going forward. Second, it uncovers a key role played by bank funding (deposit growth and external borrowing slowed considerably) but whose effect was frequently dampened by expansionary monetary policy. Third, bank-level fundamentals - capitalization and loan quality - helped to explain differences in credit growth across banks and countries.

Keywords: Bank credit, Banking sector, Credit expansion, Cross country analysis, Economic growth, Middle East, Monetary policy, North Africa

Suggested Citation

Barajas, Adolfo and Chami, Ralph and Espinoza, Raphael A. and Hesse, Heiko, Recent Credit Stagnation in the MENA Region: What to Expect? What Can Be Done? (September 2010). IMF Working Papers, Vol. , pp. 1-19, 2010. Available at SSRN: https://ssrn.com/abstract=1750707

Adolfo Barajas

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-4152 (Phone)
202-623-6070 (Fax)

Ralph Chami

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6039 (Phone)
202-623-6068 (Fax)

Raphael A. Espinoza

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

HOME PAGE: http://oxford.academia.edu/RaphaelEspinoza

Heiko Hesse (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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