1990. Fourth, in contrast, long-term credits declined in real terms. Fifth, small and medium-size banks achieved a big increase in market share, especially in short-term credits. And, sixth, savings banks expanded considerably their involvement in enterprise lending, especially in long-term credits.

Enterprise credits represent only about one third of total bank assets. Their share in total assets declined from 36% in 1987 to 30% in 1989 and 1990. The remainder of assets is made up by housing loans and holdings of housing find bonds (mainly by the NSB and accounting for about 22% of total assets), interbank claims (in'. Jing i, lances with the NBH), loans ir foreign currency<sup>7</sup> , and miscellaneous assets. For the large banks, total enterprise credits fell from 56% of total assets in 1989 to 43% in 1990. This reflects a shift away from lendir.g toward liquid assets or other lines of business, such as leasing.

The NBH data show that total enteririse credits increased by 35% between 1987 and 1990, well below the cumulative rate of consumer price inflation of 75% (Figure 2). Even with regard to produCer price inflation, which amounted to 52% in cumulative terms, there was a big decrease in the real volume of forint credits. Some of this fall has been made up by the rise in foreign currency loans, especially for foreign trade purposes, but as already noted data on their volume are not readily available.

Total forint credits suffered a substantial fall in 1988 when the large banks appear to have drastically curtailed their short term credit facilities. ARter 1988, bank credits to the enterprise sector rose by 42%. This was still below cumulative consumer price inflation, which amounted to _51%_ between 1988 and 1990 and below cumulative producer price inflation, which equalled 47%, but the fall in real terms was much lower on both indices. The share of large banks in net new lending, both short and long-term, was only 3% against 52% for small and medium size banks and 43% for savings banks.

Most of the competitive action seems to have taken place in short-term credits. The share of short-term credits in total credits to the enterprise sector rose from 50% to 57% - correspondingly the share of long-term credits fell from 50% to 43%. Short-term credits accounted for 76% of the change in total credits outstanding over the period 1987-1990. However, the total volume of shortterm credits rose by 54%, which was substantially less than cumulative inflation. The large banks accounted for only 8% of the increase in short-term credits. Small and medium-size banks contributed 62% of the change, while saviri -s banks outperformed the large banks by providing 27% of the increase in short-term credits.

The relative increase in short-term credits in recent years is understated by the collapse of short-term credits by the large banks in 1988. If the analysis focusses on the data between 1988 and 1990, the share of short-term credits in total credit growth was even greater at 87%. Moreover, the nominal growth of short-term credits between 1988 and 1990 was 84%. Thus, short-term credits expanded in real terms in the more recent period (Figure 2).

7 NBH data do not provide **an** analysis of foreign currency loans between claims on banks and nonbanks. **Their** voiome increased considerably since 1987 from **11%** of total loans (or **99%** of total assets) in 1987 to 25% of total loans (or 15% of total **assets)** in 1990.

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