Too Much of a Good Thing? Credit Booms in Transition Economies: The Cases of Bulgaria, Romania, and Ukraine

33 Pages Posted: 3 Mar 2006

See all articles by Christoph K. Duenwald

Christoph K. Duenwald

International Monetary Fund (IMF)

Nikolay Gueorguiev

International Monetary Fund (IMF)

Andrea Schaechter

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2005

Abstract

Rapid credit growth in Bulgaria, Romania, and Ukraine has been driven by successful macroeconomic stabilization, robust growth, and capital inflows. While financial deepening is both expected and welcome, the recent expansions appear to have been excessive, as evidenced by widening current account deficits in Bulgaria and Romania, and prudential concerns in Ukraine. Policy responses have included attempts to both moderate credit growth and offset its impact on domestic demand, with mixed success thus far.

Keywords: Credit boom, financial deepening, transition, Bulgaria, Romania, Ukraine

JEL Classification: E51, E58, F41

Suggested Citation

Duenwald, Christoph K. and Gueorguiev, Nikolay and Schaechter, Andrea, Too Much of a Good Thing? Credit Booms in Transition Economies: The Cases of Bulgaria, Romania, and Ukraine (June 2005). IMF Working Paper No. 05/128, Available at SSRN: https://ssrn.com/abstract=887997

Christoph K. Duenwald (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Nikolay Gueorguiev

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Andrea Schaechter

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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