Article (Scientific journals)
Information sharing, credit booms and financial stability: Do developing economies differ from advanced countries?
Leon, Florian; Guérineau, Samuel
2019In Journal of Financial Stability, 40, p. 64-76
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Keywords :
Information sharing; Credit boom; financial stability
Abstract :
[en] This paper analyses the impact of credit information sharing on financial stability, drawing special attention to its interactions with credit booms. A probit estimation of financial vulnerability episodes—identified by jumps in the ratio of non-performing loans to total loans—is run for a sample of 159 countries divided into two sub-samples according to their level of development: 80 advanced or emerging economies and 79 less developed countries. The results show that: i) credit information sharing reduces financial fragility for both groups of countries; ii) for less developed countries, the main effect is the direct effect (reduction of NPL ratio once credit boom is controlled), suggesting a portfolio quality effect; iii) credit information sharing also mitigates the detrimental impact of a credit boom on financial fragility but this result holds only for advanced and emerging countries and for household credit booms; and iv) the depth of information sharing has a negative impact on the likelihood of credit booms (but not the coverage of IS).
Disciplines :
Finance
Author, co-author :
Leon, Florian ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Guérineau, Samuel
External co-authors :
yes
Language :
English
Title :
Information sharing, credit booms and financial stability: Do developing economies differ from advanced countries?
Publication date :
February 2019
Journal title :
Journal of Financial Stability
ISSN :
1878-0962
Publisher :
Elsevier, Philadelphia, United States - Pennsylvania
Volume :
40
Pages :
64-76
Peer reviewed :
Peer Reviewed verified by ORBi
Available on ORBilu :
since 27 August 2018

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