Credit Growth in Latin America: Financial Development or Credit Boom?

Hansen, Niels-Jakob; Sulla, Olga

doi:10.5089/9781484390627.001

Cited by 26 publications

(25 citation statements)

References 30 publications

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“…According to the International Monetary Fund, real banking credit to the private sector grew 12.4 per cent a year in the region between 2004 and 2007, remained positive during the 2008-09 crisis and recovered strongly afterward to grow nearly to the pre-crisis level (Hansen and Sulla, 2013). In 2011, real credit growth was faster than in both…”

Section: Financial Products: Mortgages and Consumer Financementioning

confidence: 98%

“…In the six most financially open Latin American economies -Brazil, Chile, Colombia, Mexico, Peru and Uruguay -mortgages average 7 per cent of GDP, versus 20 per cent or more in emerging Asia and above 65 per cent in the US (Cubeddu et al 2012b). It is therefore not surprising that corporate credit has grown faster in the construction sector than in any other industry in Latin America (Hansen and Sulla, 2013).…”

Section: Box 5 Itaú Unibancomentioning

confidence: 99%

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Latin America’s Emerging Middle Classes

Dayton-Johnson¹

2015

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The global political economy is in flux as a series of cumulative crises impacts its organization and governance. The IPE series has tracked its development in both analysis and structure over the last three decades. It has always had a concentration on the global South. Now the South increasingly challenges the North as the centre of development, also reflected in a growing number of submissions and publications on indebted Eurozone economies in Southern Europe.An indispensable resource for scholars and researchers, the series examines a variety of capitalisms and connections by focusing on emerging economies, companies and sectors, debates and policies. It informs diverse policy communities as the established trans-Atlantic North declines and 'the rest', especially the BRICS, rise.

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Section: Financial Products: Mortgages and Consumer Financementioning

confidence: 98%

Section: Box 5 Itaú Unibancomentioning

confidence: 99%

Latin America’s Emerging Middle Classes

Dayton-Johnson¹

2015

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“…The only exception is Guatemala -this might reflect the presence of nonlinearities, the need for a broader definition of credit 8 , or the fact that credit did not have a significant role in financing economic activities during the period under investigation: its average growth rate was small or negative in Guatemala, as opposed to 12.4% in Latin America, during the period 2004-2011 (Hansen and Sulla, 2013).…”

Section: Cointegration Testsmentioning

confidence: 99%

Islamic Banking, Credit and Economic Growth: Some Empirical Evidence

Caporale

Helmi

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper examines the effects of Islamic banking on the causal linkages between credit and GDP by comparing two sets of seven emerging countries, the first without Islamic banks, and the second with a dual banking system including both Islamic and conventional banks. Unlike previous studies, it checks the robustness of the results by applying both time series and panel methods; moreover, it tests for both long-and short-run causality. In brief, the findings highlight significant differences between the two sets of countries reflecting the distinctive features of Islamic banks. Specifically, the time series analysis provides evidence of long-run causality running from credit to GDP in countries with Islamic banks only. This is confirmed by the panel causality tests, although in this case short-run causality in countries without Islamic banks is also found. Terms of use: Documents in

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“…Beside purely statistical approaches, some studies use econometric methods to determine the long-term equilibrium level of credit or credit growth as a function of economic fundamentals across the whole sample of countries; they then identify the boom periods for a country at the points where the level of credit is above the long-run equilibrium level. Kiss et al (2006);and Hansen and Sulla (2013). In this paper, following most recent studies, we employ the statistical approach to capture the credit boom episodes.…”

Section: Identification Of Credit Boom Episodesmentioning

confidence: 99%

Credit Booms in Developing Countries: Are They Different from Those in Advanced and Emerging Market Countries?

Meng

González

2016

Open Econ Rev

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While earlier studies focus on credit booms in advanced and emerging market countries, this paper examines the characteristics and determinants of credit booms in developing countries. The results find that credit booms in developing countries are less likely to be associated with systemic banking crises. Rather, they are more likely to be the result of financial deepening than of dangerous buildups of financial risks; the prevention of credit booms in developing countries may thus be associated with higher opportunity costs in terms of foregone growth opportunities. Random effect probit and tobit regressions find some evidence that size of financial system and favorable macroeconomic conditions are among the determinants of credit booms. Although monetary and fiscal policies do not help in preventing credit booms in developing countries, we find that prudential regulations and supervision can play a much more effective role in preventing "bad" booms, while incurring substantially lower costs. Although "bad" booms are hard to identify ahead of time, the duration and size of booms, as well as the level of credit aggregates, appear to be useful indicators in determining them.

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Credit Growth in Latin America: Financial Development or Credit Boom?

Cited by 26 publications

References 30 publications

Latin America’s Emerging Middle Classes

Latin America’s Emerging Middle Classes

Islamic Banking, Credit and Economic Growth: Some Empirical Evidence

Credit Booms in Developing Countries: Are They Different from Those in Advanced and Emerging Market Countries?

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