When Is Credit Growth Too Fast and How To Deal With It?
Cambodia’s financial system appears to be shifting to excessive credit growth. … The credit-to-GDP ratio has reached 37 percent, well above the low-income economies (LTCs). If credit growth were to continue at the current pace, by mid-2013 the ratio would exceed even the median for more advanced emerging market economies (EM). … In considering macroprudential measures, the NBC must strike a balance between choosing an instrument that is simple to implement, effective in lowing credit growth, and causes the leas distortions to the credit market. …
