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...

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Main Authors:	Choi, Moon Jung, Gutierrez, Eva, Martinez Peria, Maria Soledad
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
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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spelling	okr-10986-168892021-04-23T14:03:32Z Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis Choi, Moon Jung Gutierrez, Eva Martinez Peria, Maria Soledad 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 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. 2014-02-04T20:17:21Z 2014-02-04T20:17:21Z 2013-10 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 English en_US Policy Research Working Paper;No. 6674 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
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	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
spellingShingle	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 Choi, Moon Jung Gutierrez, Eva Martinez Peria, Maria Soledad Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis
relation	Policy Research Working Paper;No. 6674
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Choi, Moon Jung Gutierrez, Eva Martinez Peria, Maria Soledad
author_facet	Choi, Moon Jung Gutierrez, Eva Martinez Peria, Maria Soledad
author_sort	Choi, Moon Jung
title	Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis
title_short	Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis
title_full	Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis
title_fullStr	Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis
title_full_unstemmed	Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis
title_sort	dissecting foreign bank lending behavior during the 2008-2009 crisis
publisher	World Bank, Washington, DC
publishDate	2014
url	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
_version_	1764434821360123904

Dissecting Foreign Bank Lending Behavior During the 2008-2009 Crisis

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