Episodes of rapid credit growth, especially credit booms, tend to end abruptly, typically in the form of financial … crises. This paper presents the findings of a comprehensive event study focusing on 99 credit booms. Loose monetary policy … stances seem to have contributed to the build-up of credit booms across both advanced and emerging economies. In particular …

. The tendency to underprice systemic liquidity risk and currency-induced credit risk creates vulnerabilities that need … liquidity and solvency risks. The paper also shows that most dollarized countries have addressed their liquidity vulnerabilities …, but few have addressed those arising from currency-induced credit risks. …

This paper addresses two complications arising from the use of collateral requirements in debt contracts between wealth …-constrained entrepreneurs and banks. First, costly asset liquidation is found to enhance the susceptibility of debt finance to interest rate … volatility. Second, aggregate uncertainty in conjunction with limited bank capitalization is shown to produce excessive credit …

Banks’ liquidity holdings are comfortably above legal or prudential requirements in most Central American countries …. While good for financial stability, high systemic liquidity may nonetheless hinder monetary policy transmission and … precautionary liquidity buffers is associated with measures of bank size, profitability, capitalization, and financial development …

sub-Saharan Africa has grown. There is some evidence that, since the late 1990s, debt relief has assumed a larger share of … recipient governments, especially in the form of debt relief. Donor harmonization, national ownership of development plans, and …