Publication detail

Measures to tame credit growth: are they effective?

Author(s): doc. PhDr. Adam Geršl Ph.D.,
Martina Jašová ,
Type: Articles in journals with impact factor
Year: 2014
Number: 38
ISSN / ISBN: 0939-3625
Published in: Economic Systems
Publishing place:
Keywords: Credit growth; Monetary policy; Macroprudential policy; Central and Eastern Europe
JEL codes: E44; E51; E52; E58; G21
Suggested Citation: Adam Geršl, Martina Jašová, Measures to tame credit growth: Are they effective?, Economic Systems, Volume 38, Issue 1, March 2014, Pages 7-25.
Grants: GAUK 564612 - Macroprudential policy in the periods of excessive credit growth
Abstract: This paper focuses on policy measures taken to curb bank credit growth in the private sector in the pre-crisis period 2003–2007. Our analysis is based on an original survey conducted in 2010 on eleven central banks in Central and Eastern Europe (CEE). The findings reveal substantial policy intervention: a total of 82 measures were implemented in CEE during the period considered. The paper presents a panel data analysis of the effectiveness of the policy measures adopted in the region. The overall results indicate that certain measures – particularly asset classification and provisioning rules and loan eligibility criteria – might have been effective in taming bank credit growth, especially if applied in the context of more general policy measures featuring a combination of various instruments. However, in countries in which the authorities managed to somewhat decrease the flows of bank credit into the economy, the measures were often circumvented via direct, cross-border credit from foreign banks and credit provided by domestic, non-bank financial companies.

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