Assessment of Credit Growth in Lithuania

Coping with Capital Inflows: Experiences of Selected European Countries

“…In Latvia, several foreign controlled banks have been seeking to expand and maintain market share, leading them to lower lending standards(IMF, 2006). In Lithuania, the riskiness of bank exposure to the household sector have been aggravated by several factors, including the softening of credit standards(Ramanauskas, 2007). High growth rates of some types of loans, strong competition and loosening of credit standards induced the authorities to increase close monitoring of the appropriateness of risk evaluation by banks(Bank of Lithuania, Financial Stability Review, 2005) and encourage banks for more prudent risk management and strengthen capital buffers during -06 (IMF, 2007.…”