Credit expansion and financial stability in Malaysia
This study investigated the degree of synchronization between credit expansion and financial stability in Malaysia at aggregated and disaggregated levels. The dynamic factor model and a broad range of macro-financial variables are adopted to construct a financial stability index to measure the stabi...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2017
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| Online Access: | http://psasir.upm.edu.my/id/eprint/61246/ http://psasir.upm.edu.my/id/eprint/61246/1/Credit%20expansion%20and%20financial%20stability%20in%20Malaysia.pdf |
| _version_ | 1848854373131616256 |
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| author | Koong, Seow Shin Law, Siong Hook H. Ibrahim, Mansor |
| author_facet | Koong, Seow Shin Law, Siong Hook H. Ibrahim, Mansor |
| author_sort | Koong, Seow Shin |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This study investigated the degree of synchronization between credit expansion and financial stability in Malaysia at aggregated and disaggregated levels. The dynamic factor model and a broad range of macro-financial variables are adopted to construct a financial stability index to measure the stability of the Malaysian financial system. The non-parametric method is subsequently employed to gauge the degree of synchronization between credit and financial stability. The empirical findings indicated a negative synchronization between business credit and financial stability in Malaysia, suggesting that an expansion in business credit would lead to financial instability. The results implied that difficulties will arise in designing policies as business credit expands. On the other hand, there is insufficient evidence to show that increasing household credit has any negative influence on Malaysian financial stability. |
| first_indexed | 2025-11-15T11:08:50Z |
| format | Article |
| id | upm-61246 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T11:08:50Z |
| publishDate | 2017 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-612462018-09-07T03:27:14Z http://psasir.upm.edu.my/id/eprint/61246/ Credit expansion and financial stability in Malaysia Koong, Seow Shin Law, Siong Hook H. Ibrahim, Mansor This study investigated the degree of synchronization between credit expansion and financial stability in Malaysia at aggregated and disaggregated levels. The dynamic factor model and a broad range of macro-financial variables are adopted to construct a financial stability index to measure the stability of the Malaysian financial system. The non-parametric method is subsequently employed to gauge the degree of synchronization between credit and financial stability. The empirical findings indicated a negative synchronization between business credit and financial stability in Malaysia, suggesting that an expansion in business credit would lead to financial instability. The results implied that difficulties will arise in designing policies as business credit expands. On the other hand, there is insufficient evidence to show that increasing household credit has any negative influence on Malaysian financial stability. Elsevier 2017-02 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/61246/1/Credit%20expansion%20and%20financial%20stability%20in%20Malaysia.pdf Koong, Seow Shin and Law, Siong Hook and H. Ibrahim, Mansor (2017) Credit expansion and financial stability in Malaysia. Economic Modelling, 61. 339 - 350. ISSN 0264-9993; ESSN: 1873-6122 10.1016/j.econmod.2016.10.013 |
| spellingShingle | Koong, Seow Shin Law, Siong Hook H. Ibrahim, Mansor Credit expansion and financial stability in Malaysia |
| title | Credit expansion and financial stability in Malaysia |
| title_full | Credit expansion and financial stability in Malaysia |
| title_fullStr | Credit expansion and financial stability in Malaysia |
| title_full_unstemmed | Credit expansion and financial stability in Malaysia |
| title_short | Credit expansion and financial stability in Malaysia |
| title_sort | credit expansion and financial stability in malaysia |
| url | http://psasir.upm.edu.my/id/eprint/61246/ http://psasir.upm.edu.my/id/eprint/61246/ http://psasir.upm.edu.my/id/eprint/61246/1/Credit%20expansion%20and%20financial%20stability%20in%20Malaysia.pdf |