Credit Growth and Bank Soundness : Fast and Furious?

WPIEA2011278 Image
Price:  $18.00

Author/Editor: Deniz Igan, Marcelo Pinheiro
Release Date: © December, 2011
ISBN : 978-1-46392-595-6
Stock #: WPIEA2011278
Stock Status: On back-order

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We examine the risks to bank soundness associated with credit booms in a large set of countries. Using bank-level data in 90 countries between 1995 and 2005, we analyze the relationship between credit growth and bank soundness taking into account the potential two-way causality. We find that, while sounder banks tend to grow faster at moderate-growth periods, credit growth becomes less dependent on soundness during booms. These findings shed some light on why credit booms are often associated with financial crises.


Economic sectors , Private sector

More publications in this series: Working Papers

More publications by: Deniz Igan ; Marcelo Pinheiro