Abstract

It is well known that banks foster economic growth. Many advanced economies experienced over-lending to private sector in terms of own GDP. Current economic crisis urged economists and policy makers to consider more seriously bank capital adequacy regarding the drivers as well as the consequences. To this end a lot of articles have been written on the pros and cons of banking capital adequacy as well as on the banking capital adequacy drivers. In the present paper an attempt will be made to estimate empirically the optimum bank loan policy so as to maximize economic growth rate in the advanced economies.

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