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Author: International Monetary Fund Publisher: International Monetary Fund ISBN: 1455201138 Category : Business & Economics Languages : en Pages : 47
Book Description
In the past decade, most of the EU New Member States experienced a severe credit-boom bust cycle. This paper argues that the credit boom-bust cycle was to a large extent the result of factors external to the region (“bad luck”). Rapid credit growth followed from a high liquidity in global markets and the particular attractiveness of “new Europe” for capital flows, while the end of the credit cycle was brought about by a global crisis. However, the fact that some countries managed to avoid most of the excesses, including asset price bubbles and foreign exchange lending, suggests that policies and policy failures (“bad policies”)—in particular overly expansionary macroeconomic settings and excessively optimistic views on prudential risks—also have played a critical role.
Author: International Monetary Fund Publisher: International Monetary Fund ISBN: 1455201138 Category : Business & Economics Languages : en Pages : 47
Book Description
In the past decade, most of the EU New Member States experienced a severe credit-boom bust cycle. This paper argues that the credit boom-bust cycle was to a large extent the result of factors external to the region (“bad luck”). Rapid credit growth followed from a high liquidity in global markets and the particular attractiveness of “new Europe” for capital flows, while the end of the credit cycle was brought about by a global crisis. However, the fact that some countries managed to avoid most of the excesses, including asset price bubbles and foreign exchange lending, suggests that policies and policy failures (“bad policies”)—in particular overly expansionary macroeconomic settings and excessively optimistic views on prudential risks—also have played a critical role.
Author: Sophie Sirtaine Publisher: World Bank Publications ISBN: Category : Access to Finance Languages : en Pages : 47
Book Description
High credit growth in Emerging Europe, generally considered a sign of catching-up with the "old" Europe, has begun receiving considerable attention among investors and policymakers alike. Given heightened global risks and the demands under the European Union accession process, the need to better understand this high credit growth's drivers, riskiness, and the possible macroeconomic and financial stability consequences is strong. The authors adopt a holistic approach in reviewing the rapid credit growth experienced in the region, examining macroeconomic, financial sector, corporate sector, and asset market consequences and possible vulnerabilities. They consider three possible scenarios-a catching-up with older European countries, a soft landing as experienced by Portugal in the early 2000s, and a hard landing as experienced by Asia in 1997.
Author: Pavel Harnych Publisher: LAP Lambert Academic Publishing ISBN: 9783659409974 Category : Languages : en Pages : 96
Book Description
The extent of credit denominated in a foreign currency has been a hot issue in the Central and Eastern Europe since the advent of the Great Recession in 2008, as the risk associated with previous boom of FX loans has materialized. Therefore, this book examines several topics related to this phenomenon. Is the exchange rate regime or credibility of the central bank a main driver of credit euroization? Which obstacles for monetary policy stem from a large FX indebtedness? Is there a significant relation between pre-crisis FX credit growth on one hand, and the GDP growth, surge in non-performing loans or sovereign CDS spreads on the other? These are the main questions which the author answers in his book. Additionally, the author chose Hungary for his case study, as this country's experience perfectly illustrates how a combination of a loose fiscal and monetary policy as well as banks' lax lending practices can lead to a serious distress in the economy. A welfare impact of recent government schemes designed to mitigate surging FX debt burden to households is also estimated and related to debtors taking out a loan in domestic currency.
Author: Paul van den Noord Publisher: ISBN: 9789279153631 Category : European Union countries Languages : en Pages : 0
Book Description
The European economy is emerging from its deepest recession since the 1930s. This volume, which brings together economic analysis from the European Commission services, explains how swift policy response avoided a financial meltdown. Europe also needs an improved co-ordinated crisis-management framework to help it respond to any similar situations that may arise in the future. Economic Crisis in Europe is a much-anticipated volume which shows that the beginnings of such a crisis-management framework are emerging, building on existing institutions and legislation and complemented by new initiatives.
Author: Peter Backe Publisher: ISBN: Category : Languages : en Pages : 40
Book Description
Credit to the private sector has risen rapidly in many Central and Eastern European EU Member States (MS) and acceding countries (AC) in recent years. The lending boom has recently been particularly strong in the segment of loans to households, primarily mortgage-based housing loans, and in those countries that operate currency boards or other forms of hard pegs. The main aim of this paper is to propose a conceptual framework to analyze the observed developments with a view to exploring some policy implications at a stage in which these countries are preparing for their prospective integration with the euro area. To achieve this, we first use a stylized New Neoclassical Synthesis (NNS) framework, which has recently been advanced by Goodfriend (2002) and Goodfriend and King (2000). We then discuss the implications of the NNS model for credit dynamics and ensuing monetary policy challenges. Specifically, we emphasize consumption smoothing as an important channel of the observed credit expansion and we show how it is related to and how it affects the monetary policy making in MS and AC. In doing so, we place our discussion in the context of the monetary integration process in general and the nominal convergence process in particular.
Author: Mr.Shekhar Aiyar Publisher: International Monetary Fund ISBN: 1513511653 Category : Business & Economics Languages : en Pages : 79
Book Description
Europe’s banking system is weighed down by high levels of non-performing loans (NPLs), which are holding down credit growth and economic activity. This discussion note uses a new survey of European country authorities and banks to examine the structural obstacles that discourage banks from addressing their problem loans. A three pillared strategy is advocated to remedy the situation, comprising: (i) tightened supervisory policies, (ii) insolvency reforms, and (iii) the development of distressed debt markets.
Author: Ms.Pritha Mitra Publisher: International Monetary Fund ISBN: 1455228036 Category : Business & Economics Languages : en Pages : 29
Book Description
The recent boom-bust episode in Emerging Europe was largely the product of surges and sudden stops in capital inflows. This paper empirically argues that the sectors into which capital flows determines their impact on GDP growth. Applying data from EU New Member States, it is found that capital flows into real estate have a greater impact on swings in GDP than other sectors, irrespective of a country's exchange rate or fiscal policy. Consequently, as new waves of capital inflows spread to emerging markets, policies may usefully focus on supporting capital inflows towards economic sectors that minimize large swings in GDP.
Author: Mr.Jeffrey R. Franks Publisher: International Monetary Fund ISBN: 1484338499 Category : Business & Economics Languages : en Pages : 47
Book Description
We examine economic convergence among euro area countries on multiple dimensions. While there was nominal convergence of inflation and interest rates, real convergence of per capita income levels has not occurred among the original euro area members since the advent of the common currency. Income convergence stagnated in the early years of the common currency and has reversed in the wake of the global economic crisis. New euro area members, in contrast, have seen real income convergence. Business cycles became more synchronized, but the amplitude of those cycles diverged. Financial cycles showed a similar pattern: sychronizing more over time, but with divergent amplitudes. Income convergence requires reforms boosting productivity growth in lagging countries, while cyclical and financial convergence can be enhanced by measures to improve national and euro area fiscal policies, together with steps to deepen the single market.
Author: International Monetary Fund
Author: International Monetary Fund
Author: Sophie Sirtaine
Author: Pavel Harnych
Author: Peter Backé
Author: Paul van den Noord
Author: Peter Backe
Author: Mr.Shekhar Aiyar
Author: Pascal Fontaine
Author: Ms.Pritha Mitra
Author: Mr.Jeffrey R. Franks