%0 Journal Article
%T Assessing the Sustainability of Credit Growth: The case of Central and Eastern European Countries
%A Coudert
%A Virginie
%A Pouvelle
%A Cyril
%J The European Journal of Comparative Economics
%D 2010
%I European Association for Comparative Economic Studies and Universita Carlo Cattaneo
%X Credit growth rates as high as 30% or 50% a year were observed in some Central Eastern European countries (CEECs) in 2006-2007, such as the Baltic States, Bulgaria or Romania. This strong credit growth could have been due to the catching-up process but could also have been excessive, paving the way to the credit crunch that followed the crisis in 2008-2009. We try to assess the excessiveness of credit by applying a number of methods. First, we consider the gap between current credit and its long-term trend and we find some signs of credit booms, in several CEECs in 2005-2007. Second, we assess the "normal" growth of credit with regard to fundamentals through econometric estimations. Credit growth is also shown to have been excessive in several countries just before the 2008-2009 financial crisis.
%K credit boom
%K transition
%K financial development
%U http://eaces.liuc.it/18242979201001/182429792010070104.pdf