Total credit as an early warning indicator for systemic banking crises

摘要: Credit-to-GDP gaps are valuable early warning indicators for systemic banking crises. As such,they useful identifying vulnerabilities and can help guide the deployment of macroprudential tools such as build-up countercyclical capital buffers. In line with Basel III recommendations, credit-to-GDP be further improved by taking account all sources credit to private non-financial sector, rather than just bank credit. Drawing on a new BIS database, this special feature finds that total developments predict risk crises better based solely credit.