We assess the extent to which capital buffers (the capital banks hold in excess of the regulatory minimum) exacerbate rather than reduce the cyclical behavior of credit. We empirically study the relationships between output gap, capital buffers and loan growth with firm-level data for French...

Strong credit growth rates in transition countries may result from a normal catching-up process in a framework of financial development. However, as elsewhere, they can also pertain to a “credit boom”, paving the way to future “credit crunches”. We try to disentangle these two types of...

We assess the extent to which bank capital buffers exacerbate the cyclical behavior of credit. We empirically study the relationships between GDP growth, capital buffers and loan growth with firm-level data for French banks over the period 1993–2009. Based on panel data simultaneous equations...

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...