Public Finance Quarterly Archive Articles

Categorising the Central Bank's Credit Incentive Programs by Targeting and Intensity

14:55, január 10, 2018.
Pál Péter Kolozsi
PhD, Associate Professor,
Corvinus University of Budapest, MNB Department,
Public Finance and General Government Institute, National University
of Public Service,
Head of Department, National Bank of Hungary

Bianka Parragh
PhD, Assistant Professor,
Public Finance and General Government Institute, National University
of Public Service,
member of the Monetary Council, National Bank of Hungary

György Pulai
Head of Department, National Bank of Hungary

Published in: Public Finance Quarterly 2017/4. (p. 502-523.)


Summary: The global financial crisis that broke out in 2007–2008 substantively set back activity in the credit market. Several central banks reacted to this by implementing credit incentive programs. Based on the program parameters, our study evaluated 14 international and Hungarian credit incentive programs launched by central banks in terms of targeting and intensity (strength of incentives). After the outbreak of the crisis, there was a clear trend for credit incentive programs becoming increasingly targeted and highly incentivised, without any clear trends in terms of sizing. The shift from less targeted and less highly incentivised programs towards more targeted, higher-intensity ones was typical both internationally and within Hungary. The Hungarian credit incentive programs introduced after 2013 show extensive targeting and intensity levels, even on an international scale.

Keywords: credit incentives, monetary policy, crisis management

JEL codes: E51, E52, H12, E59



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