Assessing and Managing Rapid Credit Growth and the Role of Supervisory and Prudential Policies

59 Pages Posted: 3 Mar 2006

See all articles by Paul Hilbers

Paul Hilbers

International Monetary Fund (IMF)

Inci Otker-Robe

International Monetary Fund (IMF) - Monetary and Capital Markets Department; World Bank

Ceyla Pazarbasioglu

International Monetary Fund (IMF) - International Capital Markets Department

Gudrun Johnsen

Copenhagen Business School

Multiple version iconThere are 2 versions of this paper

Date Written: July 2005

Abstract

This paper reviews trends in bank lending to the private sector, with a particular focus on Central and Eastern European countries, and finds that rapid growth of private sector credit continues to be a key challenge for most of these countries. The paper discusses possible implications for economic and financial stability and the policy options available to counter and reduce these risks. It argues that the authorities will need to focus on the implications for both the macro economy and the financial system and, depending on their assessment, may need a comprehensive policy response comprising a mix of macro and prudential policies. In particular where there are limitations to the effective use of monetary and fiscal measures, supervisory and prudential policy responses will have a key role in addressing financial stability concerns.

Keywords: credit growth, financial stability, supervisory and prudential policies

JEL Classification: E44, E51, G21

Suggested Citation

Hilbers, Paul and Ötker-Robe, İnci and Pazarbasioglu, Ceyla and Johnsen, Gudrun, Assessing and Managing Rapid Credit Growth and the Role of Supervisory and Prudential Policies (July 2005). IMF Working Paper No. 05/151, Available at SSRN: https://ssrn.com/abstract=888020

Paul Hilbers (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

İnci Ötker-Robe

International Monetary Fund (IMF) - Monetary and Capital Markets Department ( email )

United States
202 623-7000 (Phone)
202 623-4661 (Fax)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Ceyla Pazarbasioglu

International Monetary Fund (IMF) - International Capital Markets Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-5967 (Phone)
202-589-5967 (Fax)

Gudrun Johnsen

Copenhagen Business School ( email )

Solbjerg Plads 3
2000 Frederiksberg
Fredriksberg, 2000
Denmark

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