Estonian paper looks at Eastern European credit
Lack of competition in banking sectors is fueling pro-cyclical credit creation, researchers find
Central and Eastern European countries’ banking sectors may be fueling pro-cyclical credit creation due to a lack of competition, a working paper published by the Bank of Estonia finds.
In The evolution and heterogeneity of credit procyclicality in Central and Eastern Europe, Juan Carlos Cuestas, Yannick Lucotte and Nicolas Reigl look at data on 11 countries in the region from 2000 to 2016.
The authors estimate a panel vector autoregressive model for credit creation in the sample countries
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