Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis

This paper analyzes the lending behavior of foreign-owned banks during the recent global crisis. Using bank-level panel data for countries in Central and Eastern Europe, East Asia, and Latin America, the paper explores the role of affiliate and parent financial characteristics, host location, as well as the impact of parent geographic origin and reach on foreign banks' credit growth. Overall, the analysis finds robust evidence that foreign banks curtailed the growth of credit relative to other banks, independent of the host region. Banks from the United States reduced loan growth less than other parent banks. Neither the global nor regional reach of parent banks influenced the lending growth of foreign affiliates. However, the funding structure of foreign bank affiliates and the capitalization of parent banks do help explain the lending behavior of foreign banks during the global crisis. Although not the focus of the paper, it also finds that government-owned banks played a countercyclical role in all regions.

Bibliographic Details

Main Authors:	Choi, Moon Jung, Gutierrez, Eva, Martinez Peria, Maria Soledad
Format:	Policy Research Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2013-10
Subjects:	ACCOUNTING, AFFILIATE, AFFILIATES, ASSETS RATIO, BALANCE SHEET, BANK ASSETS, BANK BEHAVIOR, BANK CREDIT, BANK FOR INTERNATIONAL SETTLEMENTS, BANK LENDING, BANK LIQUIDITY, BANK OF GREECE, BANK OF KOREA, BANK REGULATION, BANKING SECTOR, BANKING SECTOR EFFICIENCY, BANKING SECTORS, BANKING SYSTEM, BANKING SYSTEMS, BANKS, CAPITAL BASE, CAPITALIZATION, CENTRAL BANK, CENTRAL GOVERNMENTS, COLLATERAL, COMMERCIAL BANKS, COMMITMENT LETTERS, CONSUMER PRICE INDEX, COOPERATIVE BANKS, CREDIT COOPERATIVES, CREDIT GROWTH, CREDIT INSTITUTIONS, CREDIT RISKS, DEPENDENT, DEPOSIT, DEPOSITS, DEVELOPING COUNTRIES, DIRECT OWNERSHIP, DIVERSIFICATION, DIVERSIFIED BANKING, DOMESTIC BANKS, DUMMY VARIABLE, DUMMY VARIABLES, ECONOMICS, EMERGING MARKET, EMERGING MARKETS, EQUITY RATIO, EQUITY RATIOS, EXTERNAL SHOCKS, FEDERAL RESERVE, FEDERAL RESERVE BANK, FEDERAL RESERVE BANK OF BOSTON, FEDERAL RESERVE BANK OF NEW YORK, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL DATA, FINANCIAL GLOBALIZATION, FINANCIAL HEALTH, FINANCIAL INFORMATION, FINANCIAL INSTITUTIONS, FINANCIAL SECTOR REGULATION, FINANCIAL STABILITY, FINANCIAL STUDIES, FINANCIAL SUPPORT, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FOREIGN BANK, FOREIGN BANK ENTRY, FOREIGN BANK PARTICIPATION, FOREIGN BANKS, FOREIGN CURRENCY, FOREIGN OWNERSHIP, GOOD GOVERNANCE, GOVERNMENT BANK, GOVERNMENT BANKS, GOVERNMENT OWNERSHIP, HOST COUNTRIES, HOST COUNTRY, INTERNATIONAL BANK, INTERNATIONAL BANK LENDING, INTERNATIONAL FINANCIAL INSTITUTIONS, INTERNATIONAL FINANCIAL STATISTICS, JURISDICTIONS, LARGE BANKS, LENDING BEHAVIOR, LENDING PATTERNS, LIQUID ASSETS, LIQUIDITY RATIO, LOAN, LOAN MARKET, LOAN PORTFOLIO, LOCAL GOVERNMENTS, MACROECONOMIC CONDITIONS, MARKET DATA, MONEY MARKET, MULTINATIONAL, MULTINATIONAL BANKS, NEGATIVE EQUITY, NUMBER OF BANKS, OWNERSHIP DATA, OWNERSHIP INFORMATION, OWNERSHIP STRUCTURE, PARENT COMPANIES, PARENT COMPANY, PRIVATE BANKS, PROFITABILITY, PROFITABILITY RATIO, PUBLIC BANKS, PUBLIC SECTOR BANK, REAL SECTOR, REGIONAL BANKS, REGIONAL DUMMIES, REGIONAL DUMMY, RISK AVERSION, RISK MANAGEMENT, RISK NEUTRAL, ROLE OF BANK, SAVINGS, SAVINGS BANKS, SHARE OF BANK ASSETS, SOLVENCY, SUPPLY OF CREDIT, UNION, WHOLESALE FUNDING,
Online Access:	http://documents.worldbank.org/curated/en/2013/10/18429017/dissecting-foreign-bank-lending-behavior-during-2008-2009-crisis-dissecting-foreign-bank-lending-behavior-during-2008-2009-crisis http://hdl.handle.net/10986/16889
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