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Determinants of Credits on Private Sector in CEE Countries

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  • Gergana Mihaylova-Borisova

    (University of National and World Economy, Sofia, Bulgaria)

Abstract

The study determines the factors behind the bank credit dynamics in CEE countries by using the dynamic balanced econometric panel model. The following CEE countries are covered: Bulgaria, Lithuania, Romania, Czech Republic, Slovenia, Poland, Estonia, Hungary, Latvia and Slovak Republic. The period of investigation is 2008 to 2021, covering crises in the analyzed time span. The results showed that the economic development, measured by the GDP growth rate determines and affects positively the financial performance variables in particular the share of the credits to private sector in GDP in the analyzed countries. The level of non-performing loans and deposits also have effect on the bank’s performance of the covered countries. The results lead to the conclusion that measures should be taken for the real sector restructuring so that it becomes more productive, which will also contribute to a more sustainable performance of the CEE countries’ financial system.

Suggested Citation

  • Gergana Mihaylova-Borisova, 2023. "Determinants of Credits on Private Sector in CEE Countries," Economic Research Guardian, Mutascu Publishing, vol. 13(1), pages 2-15, June.
    • Handle: RePEc:wei:journl:v:13:y:2023:i:1:p:2-15
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    More about this item

    Keywords

    Private loans; Real GDP growth rate; Credit factors; CEE countries;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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