Lending Booms, Real Estate Bubbles and the Asian Crisis

February 1, 2002

Preview Citation

Format: Chicago

Abdelhak S Senhadji, and Charles Collyns. Lending Booms, Real Estate Bubbles and the Asian Crisis, (USA: International Monetary Fund, 2002) accessed December 22, 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 paper examines the link between lending booms, asset price cycles, and financial crises across East Asian countries. Both theoretical arguments and empirical evidence support a strong relationship between bank lending and asset price inflation, especially in the real estate market. While asset price bubbles were present in most Asian countries during the 1990s, their subsequent bust has affected countries quite differently. Some countries underwent severe exchange and financial crises, while others were able to weather the storm with much less damage. This experience underlines the importance of a strong bank regulatory system.

Subject: Asset bubbles, Asset prices, Credit, Financial crises, Land prices, Money, Prices, Real estate prices

Keywords: Adverse selection, Asia and Pacific, Asia Crisis, Asset bubbles, Asset price bubbles, Asset prices, Credit, East Asia, Exchange market crisis, Financial market, Land prices, Lending Booms, Price index, Property market, Property price, Rate of return, Real Estate Bubbles, Real estate prices, WP

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/020
Stock No:

WPIEA0202002
ISBN:

9781451843859
ISSN:

1018-5941

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