IDEAS home Printed from https://ideas.repec.org/p/bth/wpaper/2003-11.html
   My bibliography  Save this paper

Banking Sector Fundamentals: Learning from the Recent Bank Lending Contraction

Author

Listed:
  • Mathinee Subhaswasdikul

    (Bank of Thailand)

  • Don Nakornthab

    (Bank of Thailand)

Abstract

The 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.

Suggested Citation

  • Mathinee Subhaswasdikul & Don Nakornthab, 2003. "Banking Sector Fundamentals: Learning from the Recent Bank Lending Contraction," Working Papers 2003-11, Monetary Policy Group, Bank of Thailand.
    • Handle: RePEc:bth:wpaper:2003-11
    as

    Download full text from publisher

    File URL: http://www.bot.or.th/Thai/EconomicConditions/Publication/DiscusPaper/DocLip_discussion/dp012003mathinee_thai.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sealey, C W, Jr, 1979. "Credit Rationing in the Commercial Loan Market: Estimates of a Structural Model under Conditions of Disequilibrium," Journal of Finance, American Finance Association, vol. 34(3), pages 689-702, June.
    2. Ito, Takatoshi & Ueda, Kazuo, 1981. "Tests of the Equilibrium Hypothesis in Disequilibrium Econometrics: An International Comparison of Credit Rationing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(3), pages 691-708, October.
    3. Maddala, G S & Nelson, Forrest D, 1974. "Maximum Likelihood Methods for Models of Markets in Disequilibrium," Econometrica, Econometric Society, vol. 42(6), pages 1013-1030, November.
    4. Mr. Adolfo Barajas & Mr. Roberto Steiner, 2002. "Credit Stagnation in Latin America," IMF Working Papers 2002/053, International Monetary Fund.
    5. Hancock, Diana & Laing, Andrew J. & Wilcox, James A., 1995. "Bank capital shocks: Dynamic effects on securities, loans, and capital," Journal of Banking & Finance, Elsevier, vol. 19(3-4), pages 661-677, June.
    6. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    7. Agenor, Pierre-Richard & Aizenman, Joshua & Hoffmaister, Alexander W., 2004. "The credit crunch in East Asia: what can bank excess liquid assets tell us?," Journal of International Money and Finance, Elsevier, vol. 23(1), pages 27-49, February.
    8. Nargis Bharucha & Ellis W. Tallman, 2000. "Credit crunch or what? Australian banks during the 1986–93 credit cycle," Economic Review, Federal Reserve Bank of Atlanta, vol. 85(Q3), pages 13-34.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gergely Kiss & Márton Nagy & Balázs Vonnák, 2006. "Credit Growth in Central and Eastern Europe: Convergence or Boom?," MNB Working Papers 2006/10, Magyar Nemzeti Bank (Central Bank of Hungary).
    2. Chansarn, Supachet, 2005. "The efficiency in Thai financial sector after the financial crisis," MPRA Paper 1776, University Library of Munich, Germany, revised Dec 2006.
    3. Attila Csajbok & Pervin Dadashova & Pavlo Shykin & Balazs Vonnak, 2020. "Consumer Lending in Ukraine: Estimation of the Equilibrium Level," Visnyk of the National Bank of Ukraine, National Bank of Ukraine, issue 249, pages 4-12.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maethinee Supsawaddkul & Don Nakornthap, 2002. "Banking Sector Fundamentals: Learning from the Recent Bank Lending Contraction," Working Papers 2002-02, Monetary Policy Group, Bank of Thailand.
    2. Poghosyan, Tigran, 2011. "Slowdown of credit flows in Jordan in the wake of the global financial crisis: Supply or demand driven?," Economic Systems, Elsevier, vol. 35(4), pages 562-573.
    3. repec:zbw:rwirep:0361 is not listed on IDEAS
    4. Ramirez, Francisco A., 2012. "Crédito Al Sector Privado En República Dominicana (1997-2011): ¿Existe Evidencia De Racionamiento Del Crédito? [Private Sector Loans in the Dominican Republic (1997-2011):Is There Evidence of credi," MPRA Paper 68333, University Library of Munich, Germany.
    5. Torsten Schmidt & Lina Zwick, 2012. "In Search for a Credit Crunch in Germany," Ruhr Economic Papers 0361, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    6. Lorenzo Burlon & Davide Fantino & Andrea Nobili & Gabriele Sene, 2016. "The quantity of corporate credit rationing with matched bank-firm data," Temi di discussione (Economic working papers) 1058, Bank of Italy, Economic Research and International Relations Area.
    7. El-Shazly Alaa, 2005. "Imperfect Information and Credit Rationing Equilibrium: Evidence from Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 3(2), pages 59-72, August.
    8. Philippe Adair & Fredj Fhima, 2014. "Small and Medium-sized Enterprises' Credit Rationing on the Tunisian Bank Credit Market," Post-Print hal-01667356, HAL.
    9. Schmidt, Torsten & Zwick, Lina, 2012. "In Search for a Credit Crunch in Germany," Ruhr Economic Papers 361, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Adolfo Barajas & Enrique López & Hugo Oliveros, 2001. "¿Por qué en Colombia el Crédito al Sector Privado es tan Reducido," Borradores de Economia 185, Banco de la Republica de Colombia.
    11. Patrick Artus, 1984. "Le fonctionnement du marché du crédit : diverses analyses dans un cadre de déséquilibre," Revue Économique, Programme National Persée, vol. 35(4), pages 591-622.
    12. Hurlin, Christophe & Kierzenkowski, Rafal, 2007. "Credit market disequilibrium in Poland: Can we find what we expect?: Non-stationarity and the short-side rule," Economic Systems, Elsevier, vol. 31(2), pages 157-183, June.
    13. Luc Bauwens & Michel Lubrano, 2007. "Bayesian Inference in Dynamic Disequilibrium Models: An Application to the Polish Credit Market," Econometric Reviews, Taylor & Francis Journals, vol. 26(2-4), pages 469-486.
    14. repec:bla:scotjp:v:49:y:2002:i:2:p:162-95 is not listed on IDEAS
    15. Philippe Adair & Mohamed Adaskou, 2016. "The determinants of credit rationing of SMEs in France: A disequilibrium model upon a balanced panel [Les déterminants du rationnement du crédit des PME en France : un modèle de déséquilibre sur un," Post-Print hal-01667299, HAL.
    16. Bofinger, Peter & Maas, Daniel & Ries, Mathias, 2017. "A model of the market for bank credit: The case of Germany," W.E.P. - Würzburg Economic Papers 98, University of Würzburg, Department of Economics.
    17. Jameel Ahmed, 2016. "Credit Conditions in Pakistan: Supply Constraints or Demand Deficiencies?," The Developing Economies, Institute of Developing Economies, vol. 54(2), pages 139-161, June.
    18. Vouldis, Angelos, 2015. "Credit market disequilibrium in Greece (2003-2011) - a Bayesian approach," Working Paper Series 1805, European Central Bank.
    19. repec:zbw:rwidps:0006 is not listed on IDEAS
    20. Juan Luis Vega, 1992. "El papel del crédito en el mecanismo de transmisión monetaria," Estudios Económicos, Banco de España, number 48.
    21. Carbo Valverde, S. & Degryse, H.A. & Rodriguez-Fernandez, F., 2011. "Lending Relationships and Credit Rationing : The Impact of Securitization," Other publications TiSEM 27ce4e3e-7bd8-45eb-b865-5, Tilburg University, School of Economics and Management.
    22. Carbo-Valverde, Santiago & Degryse, Hans & Rodríguez-Fernández, Francisco, 2015. "The impact of securitization on credit rationing: Empirical evidence," Journal of Financial Stability, Elsevier, vol. 20(C), pages 36-50.
    23. Nada Oulidi & Laurence Allain, 2009. "Credit Market in Morocco: A Disequilibrium Approach," IMF Working Papers 2009/053, International Monetary Fund.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bth:wpaper:2003-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Pornpinun Chantapacdepong The email address of this maintainer does not seem to be valid anymore. Please ask Pornpinun Chantapacdepong to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/botgvth.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.