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Credit Dynamics and Financial Globalisation

Author

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  • Philip R. Lane

Abstract

This paper reviews the impact of financial globalisation on credit dynamics. In particular, it argues that financial globalisation fundamentally alters credit demand and credit supply, since borrowers and lenders have foreign options as well as domestic options in terms of the selection of projects and funding sources. The rapid accumulation of large cross-border debt positions was a central feature in the boom phase of the European credit cycle during 2003–8 and has influenced the nature of the post-2008 financial crisis. Finally, the paper considers the range of policy reforms needed to improve macro-financial stability under international financial integration.

Suggested Citation

  • Philip R. Lane, 2013. "Credit Dynamics and Financial Globalisation," National Institute Economic Review, National Institute of Economic and Social Research, vol. 225(1), pages 14-22, August.
    • Handle: RePEc:sae:niesru:v:225:y:2013:i:1:p:r14-r22
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    Citations

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    Cited by:

    1. Giray Gozgor, 2015. "Causal relation between economic growth and domestic credit in the economic globalization: Evidence from the Hatemi-J's test," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(3), pages 395-408, April.

    More about this item

    Keywords

    domestic credit; international capital flows; financial globalisation;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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