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...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| 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 |
| 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. |
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