The Credit Crunch in East Asia : What Can Bank Excess Liquid Assets Tell Us?
The authors propose a two-step approach for assessing the extent to which the fall in credit in crisis-stricken East Asian countries was a supply- or demand-induced phenomenon. The first step involves estimating a demand function for excess liquid...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2000/11/717461/credit-crunch-east-asia-can-bank-excess-liquid-assets-tell http://hdl.handle.net/10986/19759 |
| Summary: | The authors propose a two-step approach
for assessing the extent to which the fall in credit in
crisis-stricken East Asian countries was a supply- or
demand-induced phenomenon. The first step involves
estimating a demand function for excess liquid assets held
by commercial banks. The second step involves establishing
dynamic projections for the periods after the crisis and
assessing whether or not residuals are large enough to be
viewed as indicators of an "involuntary"
accumulation of excess reserves. The results for Thailand
suggest that the contraction in bank lending that
accompanied the crisis was the result of supply factors.
Thai firms (presumably small and medium-size ones) faced
binding constraints in getting access to credit markets
after the crisis. |
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