Banking Sector Fundamentals: Learning from the Recent Bank Lending Contraction
AbstractThe paper investigates the recent contraction of bank lending in Thailand and its implication for the economy. Analyses are conducted at both aggregate and disaggregate levels. At the aggregate level, a disequilibrium econometric estimation is employed to assess the relative extent in which supply and demand factors have contributed to the credit slowdown. At the disaggregate level, the paper uses individual bank data to analyze relationship between measures of bank condition and bank lending behavior. The paper finds that availability of loanable funds and NPL overhang, both of which played a prominent role during the early stage of the contraction period, no longer appear to be major constraining factors of loan growth.
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Bibliographic InfoPaper provided by Economic Research Department, Bank of Thailand in its series Working Papers with number 2003-11.
Length: 50 pages
Date of creation: Jan 2003
Date of revision:
banks; credit crunch; financial crisis; Thailand;
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