How The Foreign Banks' Credit Supply Influence The Host Country' Credit Size

The purpose of this paper is to prove credit provided by foreign banks will lead to the credit expansion of the host country. The host country's credit expansion will lead to real asset bubbles. All studies are based on data from Thailand. Related data include local claims, total foreign claims, domestic credit, assets, bank capital, deposits, GDP. These data are related to Thailand and the foreign banks in Thailand.The first part is a theoretical review, including how foreign bank credit supply impact the host country credit size and the supply of credit led to asset bubbles, the theory of these two parts. The second part is the recovery of the financial crisis in Thailand, which provides a more intuitive understanding of the perspective. The third part is making the Theoretical analysis of credit provided by foreign banks will lead to the credit expansion of the host country. The fourth part is to verify the correctness of the theory by data analyzing and modeling. The fifth part is making the theoretical analysis of the host country's credit expansion will lead to real asset bubbles.The sixes part is to verify the correctness of the theory by data analyzing Granger Causality Test. Part VII is the relevant policy recommendations.