Credit Cycles, Credit Risk and Countercyclical Loan Provisions

Number: 
788
Published: 
Classification JEL: 
E32, E51, E60, G18, G21
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy

In this paper we investigate the impact of rapid credit growth on ex ante credit risk. We present micro-econometric evidence of the positive relationship between rapid credit growth and deterioration in lending portfolios: Loans granted during boom period