Lending Booms, Real Estate Bubbles, and the Asian Crisis

46 Pages Posted: 30 Jan 2006

See all articles by Charles Collyns

Charles Collyns

International Monetary Fund (IMF) - Asia and Pacific Department

Abdelhak Senhadji

International Monetary Fund (IMF) - Asia and Pacific Department

Date Written: January 2002

Abstract

This paper examines the link between lending booms, asset price cycles, and financial crises across East Asian countries. Both theoretical arguments and empirical evidence support a strong relationship between bank lending and asset price inflation, especially in the real estate market. While asset price bubbles were present in most Asian countries during the 1990s, their subsequent bust has affected countries quite differently. Some countries underwent severe exchange and financial crises, while others were able to weather the storm with much less damage. This experience underlines the importance of a strong bank regulatory system.

Keywords: Lending Booms, Real Estate Bubbles, Asia Crisis

JEL Classification: G12, G21

Suggested Citation

Collyns, Charles and Senhadji, Abdelhak, Lending Booms, Real Estate Bubbles, and the Asian Crisis (January 2002). IMF Working Paper No. 02/20, Available at SSRN: https://ssrn.com/abstract=879360

Charles Collyns (Contact Author)

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

700 19th Street NW
Washington, DC 20431
United States

Abdelhak Senhadji

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

700 19th Street NW
Washington, DC 20431
United States

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