Credit Crisis in View of Return on Loan
The paper sums up various data from the Czech economy concerning the issue of the current so-called credit crisis, i.e. the situation when financial institutions are lending money to businesses only with a considerable amount of distrust and much more prudence than in the past. Based on specific figures, the author proves that the banks' unwillingness to lend stems especially from the state of demand in the local economy and among foreign customers, and from the fact that the ratio of default loans to the total number of loans has been increasing in the long term, threatening the stability of banks. Apart form other issues, however, the author sees as the key factor the decreasing gross value added to one crown of credit provided to businesses. Moreover, on the figures from the Czech Statistical Office, he proves that this process had started even before the outbreak of the crisis of 2007 to 2010. In conclusion, he considers the irresponsible growth of costs in businesses and investment into projects with poor return to be decisive reasons for the drop in gross value added.
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Volume (Year): 2010 (2010)
Issue (Month): 2 ()
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References listed on IDEAS
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.:
- Charles Goodhart & Pojanart Sunirand & Dimitrios Tsomocos, 2006.
"A model to analyse financial fragility,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(1), pages 107-142, 01.
- Charles A.E. Goodhart & Pojanart Sunirand & Dimitrios P. Tsomocos, 2003. "A Model to Analyse Financial Fragility," OFRC Working Papers Series 2003fe13, Oxford Financial Research Centre.
- Charles Goodhart & Pojanart Sunirand & Dimitrios P. Tsomocos, 2004. "A model to analyse financial fragility," LSE Research Online Documents on Economics 24703, London School of Economics and Political Science, LSE Library.
- Tsomocos, Dimitrios P., 2003. "Equilibrium analysis, banking and financial instability," Journal of Mathematical Economics, Elsevier, vol. 39(5-6), pages 619-655, July.
- Dimitrios P. Tsomocos, 2003. "Equilibrium Analysis, Banking and Financial Instability," OFRC Working Papers Series 2003fe08, Oxford Financial Research Centre.
- Goodhart, Charles A. E. & Sunirand, Pojanart & Tsomocos, Dimitrios P., 2004. "A model to analyse financial fragility: applications," Journal of Financial Stability, Elsevier, vol. 1(1), pages 1-30, September.
- Charles Goodhart & Pojanart Sunirand & Dimitrios P. Tsomocos, 2004. "A model to analyse financial fragility: applications," LSE Research Online Documents on Economics 24680, London School of Economics and Political Science, LSE Library.
- Charles A.E. Goodhart & Pojanart Sunirand & Dimitrios P. Tsomocos, 2004. "A Model to Analyse Financial Fragility: Applications," OFRC Working Papers Series 2004fe05, Oxford Financial Research Centre.
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