How do transitional economies’ banking sectors transmit monetary policy? In particular, how does monetary policy interact with bank lending under a currency board regime? In the Bulgarian currency board regime, the lev is irrevocably fixed in terms of the anchor currency, the euro, and the...

New econometric evidence is provided to identify the determinants of the rapid credit growth in Bulgaria and evaluate whether the credit boom has increased bank fragility, based on a panel data analysis of 30 Bulgarian banks over the 1999-2006 period. Employing Fixed effects and GMM estimation...