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Author Bakker, Bas Berend, author

Title The credit boom in the EU new member states : bad luck or bad policies? / prepared by Bas B. Bakker and Anne-Marie Gulde
Published [Washington, D.C.] : International Monetary Fund, [2010]
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Description 1 online resource (45 pages) : color illustrations
Series IMF working paper ; WP/10/130
IMF working paper ; WP/10/130
Contents Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. The Nature and Origins of the Credit Boom of 2003-07/08; 1. Cumulative Net Capital Inflows, 2003-07; 1. Cumulative Capital Inflows, 2003-07; 2. The Surge in Capital Inflows; 3. Capital Inflows and Reforms; 2. Net Private Capital Flows; 4. The Surge in Capital Inflows -- by Type of Capital; 5. Capital Inflows and Private Sector Credit; 6. Credit Growth; 7. Private Sector Credit Growth; 8. Credit to GDP Ratio, 2008; 9. Credit, Domestic Demand and GDP; 10. The Credit Boom Led to Rising Imbalances
11. The Overheating of the Economy12. The Credit Boom; 13. External Debt and International Investment Position; III. The End of the Boom and Intial Assessment of its Cost; 14. Decline in Net Capital Inflows, 2008-09; 15. The Domestic Demand Bust; 3. External Positions of Western Banks vis-à-vis EU -9; 16. The Credit Boom-Bust and GDP Growth; IV. Policies and Policy Failures During the Boom Years; A. Risks Were Underestimated-"Europe is Different"; 17. 5-Year CDS Spreads, 2004-10; 4. Change in GDP Componentes, 2009; 5. Public Debt, 2003-07
18. External Position of Western Banks vis-à-vis Selected Regions6. Projections of Average Annual Real GDP Growth, October 2007; B. Prudential/Regulatory Policies Had only Limited Effect; C. Countries with Fixed Exchange Rates had Few Effective Policy Tools; 19. Exchange Rate Policy; 20. Exchange Rate Policy and Competitiveness; D. Excessive Foreign Exchange Risks Affected Policy Responses; 21. The Boom in Foreign Currency Loans; 22. The Role of Western Banks in Funding Foreign Currency Loans; E. Rapid Public Expenditure Growth Exacerbated Demand Pressures
7. General Government Balance on Accrual Basis23. Fiscal Policy; V. Policy Lessons: Could the Credit Boom Have Been Prevented?; References; Footnotes
Summary In the past decade, most of the EU new member states experienced a severe credit-boom bust cycle. This paper argues that the credit boom-bust cycle was to a large extent the result of factors external to the region ("bad luck"). Rapid credit growth followed from a high liquidity in global markets and the particular attractiveness of "new Europe" for capital flows, while the end of the credit cycle was brought about by a global crisis. However, the fact that some countries managed to avoid most of the excesses, including asset price bubbles and foreign exchange lending, suggests that policies and policy failures ("bad policies") in particular overly expansionary macroeconomic settings and excessively optimistic views on prudential risks also have played a critical role
Bibliography Includes bibliographical references
Notes Print version record
Subject Business cycles -- European Union countries.
Credit -- European Union countries.
Foreign exchange -- European Union countries.
Global Financial Crisis, 2008-2009.
Form Electronic book
Author Gulde, Anne-Marie, author
International Monetary Fund. European Department, issuing body
ISBN 1283563398