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Bank Lending Dynamics in Bulgaria

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  • Peter Peshev

    (University of National and World Economy, Sofia, Bulgaria)

Abstract

This paper analyzes factors for the dynamics of bank loans of non-financial firms and households in Bulgaria in the 2008-2012 period. Following a short introduction, credit demand factors are presented and analyzed first, followed by an analysis of general credit dynamics and of credit supply factors. The pre-crisis double-digit growth of bank loans extended to the non-financial companies and households was induced by strong external and internal demand and by enormous capital inflows. In the post-2008 period a process of deleveraging took place, a period of modest lending because of the weakness in demand factors. Namely, poor economic recovery was the main driver of the non-performing loans uptrend, which harmed the credit supply process.

Suggested Citation

  • Peter Peshev, 2014. "Bank Lending Dynamics in Bulgaria," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 20-29, April.
    • Handle: RePEc:nwe:eajour:y:2014:i:2:p:20-29
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    References listed on IDEAS

    as
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    3. Adrian Blundell-Wignall & Marianne Gizycki, 1992. "Credit Supply and Demand and the Australian Economy," RBA Research Discussion Papers rdp9208, Reserve Bank of Australia.
    4. Altunbas, Yener & Gambacorta, Leonardo & Marques-Ibanez, David, 2010. "Bank risk and monetary policy," Journal of Financial Stability, Elsevier, vol. 6(3), pages 121-129, September.
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    6. Mr. Christoph Duenwald & Nikolay Gueorguiev & Ms. Andrea Schaechter, 2005. "Too Much of a Good Thing? Credit Booms in Transition Economies: The Cases of Bulgaria, Romania, and Ukraine," IMF Working Papers 2005/128, International Monetary Fund.
    7. Erdinç, Didar, 2009. "From credit crunch to credit boom: transitional challenges in Bulgarian banking, 1999-2006," MPRA Paper 10735, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    crisis; bank credit; bank credit demand; bank credit supply;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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