Description: Bank Ownership and Lending Patterns during the 2008-2009 Financial Crisis : Evidence from Latin America and Eastern Europe

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Bank Ownership and Lending Patterns during the 2008-2009 Financial Crisis : Evidence from Latin America and Eastern Europe

This paper examines the impact of bank ownership on credit growth in developing countries before and during the 2008-2009 crisis. Using bank-level data for countries in Eastern Europe and Latin America, it analyzes the growth of banks' total g...

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Main Authors:	Cull, Robert, Martínez Pería, María Soledad
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	ACCOUNTING AFFILIATES ASSET RATIO ASSETS RATIO BANK ACCESS BANK ASSET BANK ASSETS BANK BEHAVIOR BANK CREDIT BANK EQUITY BANK INTERMEDIATION BANK LENDING BANK LIQUIDITY BANK LOAN BANK LOANS BANK OF GREECE BANK POLICY BANK PROFITABILITY BANK PROFITS BANK REGULATION BANK SIZE BANKING CORPORATION BANKING CRISIS BANKING INDUSTRY BANKING SECTOR BANKING SECTOR OUTREACH BANKING SECTORS BANKING SERVICES BANKING STRUCTURE BANKING SYSTEM BANKING SYSTEM ASSETS BANKING SYSTEMS BANKS BUDGET SURPLUS CAPITAL ADEQUACY CAPITAL FLOWS CAPITAL MARKETS CAPITALIZATION CENTRAL BANK CHECKS COLLAPSE CONSOLIDATION CONSUMER LOAN CONSUMER LOANS CORPORATION BANK CREDIT BANK CREDIT CRUNCH CREDIT GROWTH CREDIT LEVELS CRISIS LENDING CURRENCY UNITS DEFICITS DEPENDENT DEPOSIT DEPOSITS DEVELOPING COUNTRIES DOMESTIC BANK DOMESTIC BANKS DUMMY VARIABLE DUMMY VARIABLES ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC PROBLEMS ECONOMIES IN TRANSITION EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY RATIO EQUITY RATIOS EXCHANGE RATE EXPRESS LOANS EXTERNAL FINANCE FEDERAL RESERVE FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF BOSTON FEDERAL RESERVE BANK OF NEW YORK FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL DISTRESS FINANCIAL GLOBALIZATION FINANCIAL INSTABILITY FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL SUPPORT FINANCIAL SYSTEMS FIRM PERFORMANCE FISCAL DEFICITS FOREIGN BANK FOREIGN BANK ENTRY FOREIGN BANK PARTICIPATION FOREIGN BANKS FOREIGN CURRENCIES FOREIGN OWNERSHIP GOVERNMENT BANK GOVERNMENT BANKS GOVERNMENT DEFICITS GOVERNMENT OWNERSHIP HOLDING HOLDINGS HOST COUNTRIES HOST COUNTRY INITIATIVE INTERMEDIATION SPREADS INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INSTITUTIONS INVESTMENT BANK LARGE BANKS LENDERS LIQUID ASSETS LIQUIDITY RATIO LIQUIDITY×CRISIS LLC LOAN LOAN AMOUNTS LOAN PORTFOLIO LOAN PORTFOLIOS LOAN VOLUMES LOCAL CURRENCY LOCAL GOVERNMENTS MARKET FAILURES MONETARY FUND MONETARY POLICY MORTGAGE LOAN MORTGAGE LOANS MULTINATIONAL MULTINATIONAL BANK MULTINATIONAL BANKS OWNERSHIP STRUCTURE OWNERSHIP STRUCTURES PERSONAL FINANCE POLITICIANS POSITIVE COEFFICIENTS PRIVATE BANK PRIVATE BANKS PRIVATE BORROWERS PROFITABILITY PRUDENTIAL REGULATION PUBLIC-PRIVATE PARTNERSHIP RESIDENTIAL LOAN RESIDENTIAL MORTGAGE RESIDENTIAL MORTGAGES RETURN RETURN ON ASSETS ROLE OF BANK SAVINGS SAVINGS BANK SHARE OF ASSETS SHARE OF BANK ASSETS SHAREHOLDERS SOLVENCY SOLVENT SOLVENT BANKS SUBSIDIARIES SUBSIDIARY SUPPLY OF CREDIT SYSTEMIC CRISES SYSTEMIC STABILITY TERMS OF CREDIT TRADE CREDIT UNION WHOLESALE FUNDING
Online Access:	http://documents.worldbank.org/curated/en/2012/09/16725192/bank-ownership-lending-patterns-during-2008-2009-financial-crisis-evidence-latin-america-eastern-europe http://hdl.handle.net/10986/12035

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Summary:	This paper examines the impact of bank ownership on credit growth in developing countries before and during the 2008-2009 crisis. Using bank-level data for countries in Eastern Europe and Latin America, it analyzes the growth of banks' total gross loans as well as the growth of corporate, consumer, and residential mortgage loans. Although domestic private banks in Eastern Europe and Latin America contracted their loan growth rates during the crisis, there are differences in foreign and government-owned bank credit growth across regions. In Eastern Europe, foreign bank total lending fell by more than domestic private bank credit. These results are primarily driven by reductions in corporate loans. Furthermore, government-owned banks in Eastern Europe did not act counter-cyclically. The opposite was true in Latin America, where the growth of government-owned banks' corporate and consumer loans during the crisis exceeded that of domestic and foreign banks. Contrary to the case of foreign banks in Eastern Europe, those in Latin America did not fuel loan growth prior to the crisis and did not contract lending at a faster pace than domestic banks during the crisis.