The Maturity Structure of Bank Credit: Determinants and Effects on Economic Growth

A new data set from the transition economies shows that the private sector has increasing access to long-term bank financing. In several transition countries credit has similar maturity structure to that in Western Europe, while in other transition countries credit remains mostly short-term. Several factors explain these differences: the political and institutional environment, bank privatization, sustained low inflation, the levels of economic and financial development, and the establishment of credit information sharing institutions. In contrast, the share of foreign owned banks and banking sector competition have no influence on credit maturity.