Credit Stagnation in Latin America

March 1, 2002

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Adolfo Barajas, and Roberto Steiner. Credit Stagnation in Latin America, (USA: International Monetary Fund, 2002) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This study examines the recent marked slowdown in bank credit to the private sector in Latin America. Based on the study of eight countries (Argentina, Bolivia, Brazil, Chile, Colombia, Peru, Mexico, and Venezuela), the magnitude of the slowdown is documented, comparing it to historical behavior and to slowdown episodes in other regions of the world. Second, changes in bank balance sheets are examined to determine whether the credit slowdown is merely a reflection of a slowdown in bank deposits, or whether the asset side has changed. Third, following an econometric disequilibrium approach used in recent studies of credit slowdowns in East Asia and Finland, the paper investigates possible causes for the slowdown in three countries: Colombia, Mexico, and Peru. While both supply and demand factors appear to have played key roles, their relative importance has varied across countries.

Subject: Bank credit, Banking, Credit, Credit booms, Credit risk, Financial institutions, Financial regulation and supervision, Loans, Money

Keywords: Bank credit, Banking system, Central bank, Credit, Credit booms, Credit contraction, Credit growth, Credit risk, Credit slowdown, East Asia, Latin America, Loans, Money bank, Net credit, WP

Publication Details

Pages:

49
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/053
Stock No:

WPIEA0532002
ISBN:

9781451847390
ISSN:

1018-5941

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