Early Birds, Late Risers, and Sleeping Beauties: Bank Credit Growth to the Private Sector in Central and Eastern Europe and the Balkans

65 Pages Posted: 14 Feb 2006

See all articles by Carlo Cottarelli

Carlo Cottarelli

International Monetary Fund (IMF)

Giovanni Dell'Ariccia

International Monetary Fund (IMF) - Research Department; Centre for Economic Policy Research (CEPR)

Ivanna Vladkova Hollar

International Monetary Fund (IMF)

Date Written: November 2003

Abstract

Following a period of privatization and restructuring, commercial banks in Central and Eastern Europe and, more recently, in the Balkans have rapidly expanded their lending to the private sector. This paper describes the causes of this expansion, assesses future trends, and evaluates its policy implications. It concludes that bank credit to the private sector is likely to continue rising faster than GDP in the next few years throughout the region, picking up also in countries where so far it has been stalled. Although this growth should be regarded as a structural and positive development, policymakers will have to evaluate carefully its implications for macroeconomic developments and financial stability.

Keywords: credit booms, financial developments, transition economies

JEL Classification: E44, G21

Suggested Citation

Cottarelli, Carlo and Dell'Ariccia, Giovanni and Vladkova Hollar, Ivanna, Early Birds, Late Risers, and Sleeping Beauties: Bank Credit Growth to the Private Sector in Central and Eastern Europe and the Balkans (November 2003). IMF Working Paper, Vol. , pp. 1-65, 2003. Available at SSRN: https://ssrn.com/abstract=880889

Carlo Cottarelli (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Giovanni Dell'Ariccia

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8135 (Phone)
202-623-4352 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Ivanna Vladkova Hollar

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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