Peter Backé

Financial Cycles and the Real Economy

What is the link between the financial cycle – financial booms, followed by busts – and the real economy? What is the direction of this link and how salient is this connection? This unique book examines these fundamental questions and offers a paramount contribution to the debate surrounding the recent financial and economic crisis.

Fast Credit Expansion in Central and Eastern Europe: Catching-up, Sustainable Financial Deepening, or Bubble?

In recent years, most Central, Eastern, and South-eastern European (CEE) countries have recorded rapid rates of growth of banking system credit and, consequently, sizable increases in the ratio of credit to GDP. Not surprisingly, therefore, the assessment and the implications of credit expansion have become a key policy issue across the CEE region. In particular, the question arises whether or not the observed credit expansion can be viewed as excessive, that is, disconnected from economic fundamentals, or whether it reflects catching-up effects due to low initial credit-to-GDP ratios and sustainable financial deepening.