European Bank Deleveraging and Global Credit Conditions : Implications of a Multi-Year Process on Long-Term Finance and Beyond
This paper assesses European bank deleveraging and its impact on global credit conditions. Before the onset of the global financial crisis, European banks had rapidly expanded their foreign lending activities. However, European banks have since bee...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2013/03/17482975/european-bank-deleveraging-global-credit-conditions-implications-multi-year-process-long-term-finance-beyond http://hdl.handle.net/10986/13188 |
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okr-10986-13188 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ADVANCED ECONOMIES AFFILIATES AMOUNT OF CAPITAL APR ASSET DISPOSALS ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET QUALITY ASSET SALES BALANCE SHEET BALANCE SHEETS BANK ACTIVITIES BANK ASSET BANK ASSET QUALITY BANK ASSETS BANK CREDIT BANK DEBT BANK FINANCING BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BANK LOAN BANKING AUTHORITY BANKING CORPORATION BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKING SYSTEMS BANKING UNION BANKS BOND MARKETS BONDS BORROWING BUY BACK CAPITAL FLOWS CAPITAL GAIN CAPITAL MARKET CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANKS COLLATERAL COLLATERAL REQUIREMENTS CONSUMER LENDING CORE DEPOSITS CREDIT AGENCY CREDIT CRUNCH CREDIT FLOWS CREDIT GROWTH CREDIT TERMS CROSS-BORDER FLOWS CURRENCY COMPOSITION DEBT DEBT CRISIS DEBT ISSUANCE DEBT MARKETS DEBT REDUCTION DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT INSURANCE DEPOSITORY INSTITUTIONS DEPOSITS DEVELOPING COUNTRIES DISCRETIONARY POWERS DISINTERMEDIATION DIVIDENDS DOMESTIC CREDIT DOMESTIC FINANCIAL MARKETS DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ECONOMIC POLICIES ECONOMICS EMERGING CREDIT EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY RATIO EUROPEAN CENTRAL BANK FINANCIAL CORPORATIONS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTABILITY FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SHOCKS FINANCIAL STABILITY FINANCIAL STRESS FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIERS FORBEARANCE FOREIGN BANK FOREIGN BANKS FOREIGN CAPITAL FOREIGN CLAIMS FOREIGN EXCHANGE FUNDING SOURCE FUNDING SOURCES GLOBAL ECONOMY GLOBAL FINANCIAL STABILITY GOVERNMENT DEBT GROSS DOMESTIC PRODUCT HOME MARKETS HOST COUNTRIES HOST ECONOMIES HOUSEHOLDS INSOLVENCY INSOLVENCY RISKS INSTRUMENT INSURANCE INTEREST RATE INTERNATIONAL BANK INTERNATIONAL BANKING INTERNATIONAL BANKS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL SYSTEM INVESTMENT BANKS INVESTMENT OPPORTUNITIES INVESTOR DEMAND KEY CHALLENGE LARGE FIRMS LENDER LENDERS LENDING CONDITIONS LEVERAGE LIABILITY LIABILITY SIDE LIQUID ASSETS LIQUIDITY LIQUIDITY POSITIONS LIQUIDITY SUPPORT LOAN LOAN MARKET LOAN MATURITIES LOAN PORTFOLIOS LOAN SIZE LOAN VOLUMES LOAN-TO-DEPOSIT RATIOS LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM FINANCE LONG-TERM LENDING LONG-TERM LOAN LONG-TERM LOANS LOW INTEREST RATE MARKET CONDITIONS MARKET CONFIDENCE MARKET FINANCE MARKET RISK MARKET RISKS MARKET SHARE MARKET SHARES MATURITIES MATURITY MATURITY STRUCTURE MONETARY FUND MONEY MARKET MORTGAGE MORTGAGES POLICY RESPONSE PRIVATE CREDIT PRIVATE FUNDING PROFITABILITY PROJECT FINANCING PROVISION OF CREDIT RECAPITALIZATION RECIPIENT COUNTRIES REGULATORY FRAMEWORK REGULATORY REFORMS RESERVE RESERVE REQUIREMENTS RESERVES RETAINED EARNINGS RETURNS RISK MEASUREMENT RISK PREMIA SAFE ASSETS SECURITIES SHARE OF BANK ASSETS SOLVENCY SOVEREIGN BOND SOVEREIGN BOND MARKETS SOVEREIGN DEBT SOVEREIGN DEBT MARKETS SOVEREIGN RISKS SOVEREIGN YIELDS SUBSIDIARIES SUPPLY CHAIN SUPPLY OF CREDIT SWAP TANGIBLE ASSETS TAX TERM CREDIT TRADE FINANCE TRADE FINANCING TRADE FLOWS TRADING UNION UNSECURED DEBT VALUATIONS WARRANTS WHOLESALE FUNDING WITHDRAWAL |
| spellingShingle |
ACCOUNTING ADVANCED ECONOMIES AFFILIATES AMOUNT OF CAPITAL APR ASSET DISPOSALS ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET QUALITY ASSET SALES BALANCE SHEET BALANCE SHEETS BANK ACTIVITIES BANK ASSET BANK ASSET QUALITY BANK ASSETS BANK CREDIT BANK DEBT BANK FINANCING BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BANK LOAN BANKING AUTHORITY BANKING CORPORATION BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKING SYSTEMS BANKING UNION BANKS BOND MARKETS BONDS BORROWING BUY BACK CAPITAL FLOWS CAPITAL GAIN CAPITAL MARKET CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANKS COLLATERAL COLLATERAL REQUIREMENTS CONSUMER LENDING CORE DEPOSITS CREDIT AGENCY CREDIT CRUNCH CREDIT FLOWS CREDIT GROWTH CREDIT TERMS CROSS-BORDER FLOWS CURRENCY COMPOSITION DEBT DEBT CRISIS DEBT ISSUANCE DEBT MARKETS DEBT REDUCTION DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT INSURANCE DEPOSITORY INSTITUTIONS DEPOSITS DEVELOPING COUNTRIES DISCRETIONARY POWERS DISINTERMEDIATION DIVIDENDS DOMESTIC CREDIT DOMESTIC FINANCIAL MARKETS DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ECONOMIC POLICIES ECONOMICS EMERGING CREDIT EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY RATIO EUROPEAN CENTRAL BANK FINANCIAL CORPORATIONS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTABILITY FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SHOCKS FINANCIAL STABILITY FINANCIAL STRESS FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIERS FORBEARANCE FOREIGN BANK FOREIGN BANKS FOREIGN CAPITAL FOREIGN CLAIMS FOREIGN EXCHANGE FUNDING SOURCE FUNDING SOURCES GLOBAL ECONOMY GLOBAL FINANCIAL STABILITY GOVERNMENT DEBT GROSS DOMESTIC PRODUCT HOME MARKETS HOST COUNTRIES HOST ECONOMIES HOUSEHOLDS INSOLVENCY INSOLVENCY RISKS INSTRUMENT INSURANCE INTEREST RATE INTERNATIONAL BANK INTERNATIONAL BANKING INTERNATIONAL BANKS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL SYSTEM INVESTMENT BANKS INVESTMENT OPPORTUNITIES INVESTOR DEMAND KEY CHALLENGE LARGE FIRMS LENDER LENDERS LENDING CONDITIONS LEVERAGE LIABILITY LIABILITY SIDE LIQUID ASSETS LIQUIDITY LIQUIDITY POSITIONS LIQUIDITY SUPPORT LOAN LOAN MARKET LOAN MATURITIES LOAN PORTFOLIOS LOAN SIZE LOAN VOLUMES LOAN-TO-DEPOSIT RATIOS LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM FINANCE LONG-TERM LENDING LONG-TERM LOAN LONG-TERM LOANS LOW INTEREST RATE MARKET CONDITIONS MARKET CONFIDENCE MARKET FINANCE MARKET RISK MARKET RISKS MARKET SHARE MARKET SHARES MATURITIES MATURITY MATURITY STRUCTURE MONETARY FUND MONEY MARKET MORTGAGE MORTGAGES POLICY RESPONSE PRIVATE CREDIT PRIVATE FUNDING PROFITABILITY PROJECT FINANCING PROVISION OF CREDIT RECAPITALIZATION RECIPIENT COUNTRIES REGULATORY FRAMEWORK REGULATORY REFORMS RESERVE RESERVE REQUIREMENTS RESERVES RETAINED EARNINGS RETURNS RISK MEASUREMENT RISK PREMIA SAFE ASSETS SECURITIES SHARE OF BANK ASSETS SOLVENCY SOVEREIGN BOND SOVEREIGN BOND MARKETS SOVEREIGN DEBT SOVEREIGN DEBT MARKETS SOVEREIGN RISKS SOVEREIGN YIELDS SUBSIDIARIES SUPPLY CHAIN SUPPLY OF CREDIT SWAP TANGIBLE ASSETS TAX TERM CREDIT TRADE FINANCE TRADE FINANCING TRADE FLOWS TRADING UNION UNSECURED DEBT VALUATIONS WARRANTS WHOLESALE FUNDING WITHDRAWAL Feyen, Erik González del Mazo, Inés European Bank Deleveraging and Global Credit Conditions : Implications of a Multi-Year Process on Long-Term Finance and Beyond |
| geographic_facet |
Europe and Central Asia |
| relation |
Policy Research Working Paper;No. 6388 |
| description |
This paper assesses European bank
deleveraging and its impact on global credit conditions.
Before the onset of the global financial crisis, European
banks had rapidly expanded their foreign lending activities.
However, European banks have since been tightening credit
conditions in Europe more for longer-term lending, a trend
that banks expect to continue. European financial stress has
been transmitted to emerging markets that have experienced a
sustained deterioration of credit standards and funding
conditions. As a result, European lending in emerging
markets has been lagging behind lending of other
international banks although European banks remain a
dominant source of funding. "Good" bank
deleveraging is still necessary from a prudential
perspective. Although acute "bad" deleveraging
pressures due to financial stress, which can trigger a
credit crunch, have subsided recently on account of decisive
policy measures, tail risks remain. Curtailing lending will
probably be a core component of this multi-year deleveraging
process. Taken together, European bank deleveraging warrants
close attention. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Feyen, Erik González del Mazo, Inés |
| author_facet |
Feyen, Erik González del Mazo, Inés |
| author_sort |
Feyen, Erik |
| title |
European Bank Deleveraging and Global Credit Conditions : Implications of a Multi-Year Process on Long-Term Finance and Beyond |
| title_short |
European Bank Deleveraging and Global Credit Conditions : Implications of a Multi-Year Process on Long-Term Finance and Beyond |
| title_full |
European Bank Deleveraging and Global Credit Conditions : Implications of a Multi-Year Process on Long-Term Finance and Beyond |
| title_fullStr |
European Bank Deleveraging and Global Credit Conditions : Implications of a Multi-Year Process on Long-Term Finance and Beyond |
| title_full_unstemmed |
European Bank Deleveraging and Global Credit Conditions : Implications of a Multi-Year Process on Long-Term Finance and Beyond |
| title_sort |
european bank deleveraging and global credit conditions : implications of a multi-year process on long-term finance and beyond |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2013/03/17482975/european-bank-deleveraging-global-credit-conditions-implications-multi-year-process-long-term-finance-beyond http://hdl.handle.net/10986/13188 |
| _version_ |
1764422930453757952 |
| spelling |
okr-10986-131882021-04-23T14:03:07Z European Bank Deleveraging and Global Credit Conditions : Implications of a Multi-Year Process on Long-Term Finance and Beyond Feyen, Erik González del Mazo, Inés ACCOUNTING ADVANCED ECONOMIES AFFILIATES AMOUNT OF CAPITAL APR ASSET DISPOSALS ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET QUALITY ASSET SALES BALANCE SHEET BALANCE SHEETS BANK ACTIVITIES BANK ASSET BANK ASSET QUALITY BANK ASSETS BANK CREDIT BANK DEBT BANK FINANCING BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BANK LOAN BANKING AUTHORITY BANKING CORPORATION BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKING SYSTEMS BANKING UNION BANKS BOND MARKETS BONDS BORROWING BUY BACK CAPITAL FLOWS CAPITAL GAIN CAPITAL MARKET CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANKS COLLATERAL COLLATERAL REQUIREMENTS CONSUMER LENDING CORE DEPOSITS CREDIT AGENCY CREDIT CRUNCH CREDIT FLOWS CREDIT GROWTH CREDIT TERMS CROSS-BORDER FLOWS CURRENCY COMPOSITION DEBT DEBT CRISIS DEBT ISSUANCE DEBT MARKETS DEBT REDUCTION DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT INSURANCE DEPOSITORY INSTITUTIONS DEPOSITS DEVELOPING COUNTRIES DISCRETIONARY POWERS DISINTERMEDIATION DIVIDENDS DOMESTIC CREDIT DOMESTIC FINANCIAL MARKETS DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ECONOMIC POLICIES ECONOMICS EMERGING CREDIT EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY RATIO EUROPEAN CENTRAL BANK FINANCIAL CORPORATIONS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTABILITY FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SHOCKS FINANCIAL STABILITY FINANCIAL STRESS FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIERS FORBEARANCE FOREIGN BANK FOREIGN BANKS FOREIGN CAPITAL FOREIGN CLAIMS FOREIGN EXCHANGE FUNDING SOURCE FUNDING SOURCES GLOBAL ECONOMY GLOBAL FINANCIAL STABILITY GOVERNMENT DEBT GROSS DOMESTIC PRODUCT HOME MARKETS HOST COUNTRIES HOST ECONOMIES HOUSEHOLDS INSOLVENCY INSOLVENCY RISKS INSTRUMENT INSURANCE INTEREST RATE INTERNATIONAL BANK INTERNATIONAL BANKING INTERNATIONAL BANKS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL SYSTEM INVESTMENT BANKS INVESTMENT OPPORTUNITIES INVESTOR DEMAND KEY CHALLENGE LARGE FIRMS LENDER LENDERS LENDING CONDITIONS LEVERAGE LIABILITY LIABILITY SIDE LIQUID ASSETS LIQUIDITY LIQUIDITY POSITIONS LIQUIDITY SUPPORT LOAN LOAN MARKET LOAN MATURITIES LOAN PORTFOLIOS LOAN SIZE LOAN VOLUMES LOAN-TO-DEPOSIT RATIOS LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM FINANCE LONG-TERM LENDING LONG-TERM LOAN LONG-TERM LOANS LOW INTEREST RATE MARKET CONDITIONS MARKET CONFIDENCE MARKET FINANCE MARKET RISK MARKET RISKS MARKET SHARE MARKET SHARES MATURITIES MATURITY MATURITY STRUCTURE MONETARY FUND MONEY MARKET MORTGAGE MORTGAGES POLICY RESPONSE PRIVATE CREDIT PRIVATE FUNDING PROFITABILITY PROJECT FINANCING PROVISION OF CREDIT RECAPITALIZATION RECIPIENT COUNTRIES REGULATORY FRAMEWORK REGULATORY REFORMS RESERVE RESERVE REQUIREMENTS RESERVES RETAINED EARNINGS RETURNS RISK MEASUREMENT RISK PREMIA SAFE ASSETS SECURITIES SHARE OF BANK ASSETS SOLVENCY SOVEREIGN BOND SOVEREIGN BOND MARKETS SOVEREIGN DEBT SOVEREIGN DEBT MARKETS SOVEREIGN RISKS SOVEREIGN YIELDS SUBSIDIARIES SUPPLY CHAIN SUPPLY OF CREDIT SWAP TANGIBLE ASSETS TAX TERM CREDIT TRADE FINANCE TRADE FINANCING TRADE FLOWS TRADING UNION UNSECURED DEBT VALUATIONS WARRANTS WHOLESALE FUNDING WITHDRAWAL This paper assesses European bank deleveraging and its impact on global credit conditions. Before the onset of the global financial crisis, European banks had rapidly expanded their foreign lending activities. However, European banks have since been tightening credit conditions in Europe more for longer-term lending, a trend that banks expect to continue. European financial stress has been transmitted to emerging markets that have experienced a sustained deterioration of credit standards and funding conditions. As a result, European lending in emerging markets has been lagging behind lending of other international banks although European banks remain a dominant source of funding. "Good" bank deleveraging is still necessary from a prudential perspective. Although acute "bad" deleveraging pressures due to financial stress, which can trigger a credit crunch, have subsided recently on account of decisive policy measures, tail risks remain. Curtailing lending will probably be a core component of this multi-year deleveraging process. Taken together, European bank deleveraging warrants close attention. 2013-04-12T17:24:48Z 2013-04-12T17:24:48Z 2013-03 http://documents.worldbank.org/curated/en/2013/03/17482975/european-bank-deleveraging-global-credit-conditions-implications-multi-year-process-long-term-finance-beyond http://hdl.handle.net/10986/13188 English en_US Policy Research Working Paper;No. 6388 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia |