Does speed kill? Lending booms and their consequences in Croatia

By E. Kraft, L. Jankov. 2005

124 citations recorded by the source corpus.

Abstract Recent research connects lending booms with increased risks of banking and currency crisis. Another strand of literature connects financial deepening with long-term growth. Together, these findings pose dilemmas for policymakers. In the case of Croatia, we find that rapid loan growth increased the probability of credit quality deterioration and stimulated current account and foreign debt problems. Conventional monetary tightening was not very effective, due to capital inflows. Unconventional measures such as capital controls also had limited effectiveness. We propose limiting negative impacts by pro-active monetary policy, more restrictive fiscal policy and increased capital requirements for fast-growing banks, rather than measures to prevent lending booms ex-ante.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/dfab3c83061251d5bb8a040743f99ac611c44a7b

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. James E. Payne
2. E. Kraft
3. Richard A. Hofler
4. Muhammad Shahbaz
5. Ilhan Ozturk
6. Y. Wolde‐Rufael
7. Mehdi Ben Jebli
8. Kostas Bithas

In Finance

1. James E. Payne
2. E. Kraft
3. Richard A. Hofler

Citations in the corpus

• Assessing and Managing Rapid Credit Growth and the Role of Supervisory and Prudential Policies (2005, unknown): “Sources: IMF Country Reports (Staff Reports and Selected Issues), Annual Reports of Central Banks, Kraft and Jankov (2005), and Fernandez de Lis, Pages, and Saurina (2000).”
• Privatization, foreign bank entry and bank efficiency in Croatia: a Fourier-flexible function stochastic cost frontier analysis (2006, background): “3  For more details on this period, see Franicevic and Kraft ( 1997 ) as well as Kraft and Jankov ( 2005 ).”
• Loan Growth and Riskiness of Banks (2010, unknown): “4 Cottarelli et al. (2005) analyze loan growth in Eastern Europe and the Balkans; Kraft and Jankov (2005) focus on credit growth in Croatia. considered as atypical and excluded as well.”
• An Anatomy of Credit Booms: Evidence from Macro Aggregates and Micro Data (2008, unknown): “(2001), and Kraft and Jankov (2005)).”