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Banking Structure and Credit Growth in Central and Eastern European Countries

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Burcu Aydin

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Abstract

Recent developments have increased questions about vulnerabilities in Central and Eastern European Countries (CEE) that are experiencing credit booms. This paper analyzes the role of foreign-owned banks in these credit booms. The results show that the CEE countries depend on foreign banks, and these foreign banks depend on interbank funding. Lending by foreign banks seems driven by economic growth and interest rate margins. This lending appears independent of economic but not financial conditions in the foreign bank's home country.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/215.

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Length: 44 pages
Date of creation: 15 Sep 2008
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Handle: RePEc:imf:imfwpa:08/215

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Keywords: Banking systems ; Central and Eastern Europe ; Credit expansion ; International banks ; Economic growth ; Interest rates ; Real effective exchange rates ; Working Paper ;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Martin Cihák & Wim Fonteyne, 2009. "Five Years After: European Union Membership and Macro-Financial Stability in the New Member States," IMF Working Papers 09/68, International Monetary Fund. [Downloadable!]
  2. Albulescu, Claudiu Tiberiu, 2009. "Forecasting credit growth rate in Romania: from credit boom to credit crunch?," MPRA Paper 16740, University Library of Munich, Germany, revised 10 Aug 2009. [Downloadable!]
  3. Bednarik, Radek, 2008. "Analýza volatility devizových kurzů vybraných ekonomik
    [The Analysis of Volatility of Selected Countries' Exchange Rates]    ," MPRA Paper 15046, University Library of Munich, Germany. [Downloadable!]
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