Analysis of the Asymmetric Impact of Macroeconomic Factors on credit to the Private Sector During the Boom and Credit Crisis

The trend of bank lending can help to predict future economic conditions, so that too fast or slow credit growth may indicate financial or economic crises. In the Iranian economy, most of the financial resources required by economic enterprises are provided through the provision of facilities by the banking network. Therefore, it is very important for policymakers to know the factors influencing the growth of banking facilities in order to protect their economy. Therefore, the study of factors affecting private banking facilities in the Iranian economy is of particular importance. Therefore, the factors affecting the facilities granted by banks to the non-governmental sector with quarterly data of Iranchr('39')s economy in the period 1379 to 1399 with a nonlinear Markov switching approach by variable probability transfer method are investigated. The results show that the growth of banking facilities during the credit boom increases with increasing economic growth, while during the credit recession does not affect economic growth. Also, during the credit crisis, inflation and exchange rates had a negative effect, and the growth rate of bank deposits and interest rates on facilities had a positive effect on the growth of bank facilities. During the credit boom, the exchange rate had a negative effect and the economic growth rate and the growth rate of bank deposits had a positive effect on the growth of bank facilities. Interest rates on deposits and non-current receivables did not have a significant effect on the growth rate of bank facilities. Therefore, the asymmetric effect of economic factors on the growth of banking facilities is evident according to this approach. Therefore, the asymmetric effect of macroeconomic factors during different periods is important in policy making and the use of linear models will have consequences in policy making. Also, the probability of transition from a boom regime to a credit crunch increases with the growth of economic growth in the previous season and decreases with the growth of banking facilities in the previous season.