Bank Credit during the 2008 Financial Crisis: A Cross-Country Comparison

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Author/Editor: Ari Aisen, Michael Franken
Release Date: © February, 2010
ISBN : 978-1-45196-312-0
Stock #: WPIEA2010047
English
Stock Status: Available

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Description

This paper empirically estimates the main determinants of bank credit growth during the 2008 financial crisis. Using a sample covering over 80 countries, this paper finds that larger bank credit booms prior to the crisis and lower GDP growth of trading partners are among the most important determinants of the post-crisis bank credit slowdown. Structural variables such as financial depth and integration were also relevant. Finally, countercyclical monetary policy and liquidity played a critical role in alleviating bank credit contraction after the 2008 financial crisis, suggesting that countries should pursue appropriate institutional and macroeconomic frameworks conducive to countercyclical monetary policies.

Taxonomy

Business cycles , Economic development , Economic policy , Financial crisis , International financial system , Monetary policy




More publications in this series: Working Papers


More publications by: Ari Aisen ; Michael Franken