Credit Booms in Emerging Market Economies: A Recipe for Banking Crises?

This paper investigates whether credit booms are an important warning signal for banking crises in Asian and Latin American emerging market economies. Based on a signalling leading indicator model, the results suggest that credit booms are indeed a prelude for banking crises, especially in Latin America. To minimise a policymaker's loss- function, it is optimal to take precautionary actions in the event credit growth rises substantially above its trend.

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Year of publication:	2005-06
Authors:	Ottens, Daniel ; Lambregts, Edwin ; Poelhekke, Steven
Institutions:	de Nederlandsche Bank
Subject:	emerging markets \| credit booms and banking crises

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Extent:	application/pdf
Series:	DNB Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Classification:	E44 - Financial Markets and the Macroeconomy ; G10 - General Financial Markets. General ; G21 - Banks; Other Depository Institutions; Mortgages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005101805