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 par...
| Main Authors: | , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| 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 |
| Summary: | 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. |
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