Abstract
Abstract The main purpose of this paper is to identify the developments for bank credit allocation in Taiwan since 1994. Using a disequilibrium model, we evaluate whether there is a situation of excess demand, that is a credit crunch, or excess supply, that is a saving glut, during these periods. We find a considerable excess demand, or credit crunch, particularly during the Asian financial crisis. The main cause of this credit crunch can be attributed to the tightening in the money market because of capital outflow. On the contrary, the empirical result also shows that there were some periods experiencing an excess supply from 2001 to 2004, or a situation of saving glut as mentioned by Bernanke (2005). Furthermore, the saving glut was still prevailing during the periods of global financial crisis. This is probably due to the aggressive and pre-empt policy actions taken by the financial and monetary authorities to avoid a possible meltdown in the credit market.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
