Default, Credit Growth, and Asset Prices /

This paper uses a Merton-type estimate of the probability of default (PoD) for the main banks in a sample of Organization for Economic Cooperation and Development and middle-income countries as a proxy for the fragility of their banking systems. Based on theory and stylized facts, the paper explores...

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Bibliografski detalji
Glavni autor: Goodhart, C.
Daljnji autori: Hofmann, Boris, Segoviano, Miguel
Format: Žurnal
Jezik:English
Izdano: Washington, D.C. : International Monetary Fund, 2006.
Serija:IMF Working Papers; Working Paper ; No. 2006/223
Online pristup:Full text available on IMF
Opis
Sažetak:This paper uses a Merton-type estimate of the probability of default (PoD) for the main banks in a sample of Organization for Economic Cooperation and Development and middle-income countries as a proxy for the fragility of their banking systems. Based on theory and stylized facts, the paper explores a range of financial and real variables that explain such PoDs across time. We find property price fluctuations and bank credit to be important explanatory factors. There is two-way interaction between these variables and a clearer relationship when the variables are entered as a deviation from trend. The lag structure between such developments and PoDs is long and varies widely across countries. The paper assesses the implications of these findings for economic policy.
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Opis:1 online resource (43 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Pristup:Electronic access restricted to authorized BRAC University faculty, staff and students