The Impact of Funding Models and Foreign Bank Ownership on Bank Credit Growth : Is Central and Eastern Europe Different?
This paper provides new evidence on the factors affecting protracted credit contraction in the wake of the global financial crisis. The paper applies panel vector autoregressions to a global panel that consists of quarterly data for 41 countries fo...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/02/19007915/impact-funding-models-foreign-bank-ownership-bank-credit-growth-central-eastern-europe-different http://hdl.handle.net/10986/17341 |
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okr-10986-17341 |
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| recordtype |
oai_dc |
| 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 |
ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES AFFILIATES ASSETS AUSTRIAN NATIONAL BANK AUTOREGRESSION BALANCE SHEET BALANCE SHEETS BANK CREDIT BANK CREDIT GROWTH BANK DEPOSITS BANK LENDING BANK LENDING BEHAVIOR BANK LIABILITIES BANK OWNERSHIP BANK REGULATION BANKING ASSETS BANKING CRISIS BANKING RESTRUCTURING BANKING SECTOR BANKING SYSTEM BANKING SYSTEM ASSETS BANKING SYSTEMS BENCHMARK BONDS BORROWING BORROWINGS CAPITAL MARKETS CAPITALIZATION CENTRAL BANK CENTRAL BANKS CONTAGION CREDIT ACCESS CREDIT CRUNCH CREDIT FLOWS CREDIT GROWTH CREDIT INFORMATION CREDIT PROVISION CROSS-BORDER BANKING DEFLATORS DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT BASE DEPOSIT FUNDING DEPOSIT GROWTH DEPOSITORY DEPOSITS DEPOSITS ACCOUNT DERIVATIVES DEVELOPMENT POLICY DOMESTIC BANK DOMESTIC BANKING DOMESTIC BANKS DOMESTIC DEPOSIT DOMESTIC DEPOSITS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC SHOCKS EMERGING MARKET ECONOMIES EMERGING MARKETS ENDOGENOUS VARIABLES EXCHANGE RATE EXPORTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL GLOBALIZATION FINANCIAL INTEGRATION FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FOREIGN BANK FOREIGN BANKS FOREIGN LIABILITIES FOREIGN LIABILITY FOREIGN OWNERSHIP FUNDING SOURCE FUNDING SOURCES GDP GDP DEFLATOR GROSS DOMESTIC PRODUCT GROWTH RATE HOUSEHOLDS INSTITUTIONAL FRAMEWORKS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL BANKING INTERNATIONAL BANKS INTERNATIONAL FINANCIAL CRISES INTERNATIONAL FINANCIAL STATISTICS LIABILITIES DEPOSITS LIQUID ASSETS LIQUIDITY LIQUIDITY POSITION LIQUIDITY SHOCK LOAN LOAN MARKET LOAN-TO-DEPOSIT RATIO LOAN-TO-DEPOSIT RATIOS M1 MACROECONOMIC POLICIES MARKET ECONOMIES MORTGAGE MULTINATIONAL NATIONAL BANK NATIONAL BANK OF SLOVAKIA PRIVATE CREDIT REAL GDP REGULATORY AUTHORITIES REGULATORY FRAMEWORK REMITTANCES RESTRUCTURING PROGRAMS RISK FACTORS RULE OF LAW SAVINGS SAVINGS DEPOSITS SECURITIES SOLVENCY SUBSIDIARIES SUBSIDIARY SUPERVISION EQUITY SUPPLY OF CREDIT SURCHARGES TERM CREDIT UNION WHOLESALE FUNDING |
| spellingShingle |
ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES AFFILIATES ASSETS AUSTRIAN NATIONAL BANK AUTOREGRESSION BALANCE SHEET BALANCE SHEETS BANK CREDIT BANK CREDIT GROWTH BANK DEPOSITS BANK LENDING BANK LENDING BEHAVIOR BANK LIABILITIES BANK OWNERSHIP BANK REGULATION BANKING ASSETS BANKING CRISIS BANKING RESTRUCTURING BANKING SECTOR BANKING SYSTEM BANKING SYSTEM ASSETS BANKING SYSTEMS BENCHMARK BONDS BORROWING BORROWINGS CAPITAL MARKETS CAPITALIZATION CENTRAL BANK CENTRAL BANKS CONTAGION CREDIT ACCESS CREDIT CRUNCH CREDIT FLOWS CREDIT GROWTH CREDIT INFORMATION CREDIT PROVISION CROSS-BORDER BANKING DEFLATORS DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT BASE DEPOSIT FUNDING DEPOSIT GROWTH DEPOSITORY DEPOSITS DEPOSITS ACCOUNT DERIVATIVES DEVELOPMENT POLICY DOMESTIC BANK DOMESTIC BANKING DOMESTIC BANKS DOMESTIC DEPOSIT DOMESTIC DEPOSITS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC SHOCKS EMERGING MARKET ECONOMIES EMERGING MARKETS ENDOGENOUS VARIABLES EXCHANGE RATE EXPORTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL GLOBALIZATION FINANCIAL INTEGRATION FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FOREIGN BANK FOREIGN BANKS FOREIGN LIABILITIES FOREIGN LIABILITY FOREIGN OWNERSHIP FUNDING SOURCE FUNDING SOURCES GDP GDP DEFLATOR GROSS DOMESTIC PRODUCT GROWTH RATE HOUSEHOLDS INSTITUTIONAL FRAMEWORKS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL BANKING INTERNATIONAL BANKS INTERNATIONAL FINANCIAL CRISES INTERNATIONAL FINANCIAL STATISTICS LIABILITIES DEPOSITS LIQUID ASSETS LIQUIDITY LIQUIDITY POSITION LIQUIDITY SHOCK LOAN LOAN MARKET LOAN-TO-DEPOSIT RATIO LOAN-TO-DEPOSIT RATIOS M1 MACROECONOMIC POLICIES MARKET ECONOMIES MORTGAGE MULTINATIONAL NATIONAL BANK NATIONAL BANK OF SLOVAKIA PRIVATE CREDIT REAL GDP REGULATORY AUTHORITIES REGULATORY FRAMEWORK REMITTANCES RESTRUCTURING PROGRAMS RISK FACTORS RULE OF LAW SAVINGS SAVINGS DEPOSITS SECURITIES SOLVENCY SUBSIDIARIES SUBSIDIARY SUPERVISION EQUITY SUPPLY OF CREDIT SURCHARGES TERM CREDIT UNION WHOLESALE FUNDING Feyen, Erik Letelier, Raquel Love, Inessa Maimbo, Samuel Munzele Rocha, Roberto The Impact of Funding Models and Foreign Bank Ownership on Bank Credit Growth : Is Central and Eastern Europe Different? |
| geographic_facet |
Europe and Central Asia Europe Eastern Europe |
| relation |
Policy Research Working Paper;No. 6783 |
| description |
This paper provides new evidence on the
factors affecting protracted credit contraction in the wake
of the global financial crisis. The paper applies panel
vector autoregressions to a global panel that consists of
quarterly data for 41 countries for the period 2000-2011 and
documents that domestic private credit growth is highly
sensitive to cross-border funding shocks around the world.
This relationship is significantly stronger in Central and
Eastern Europe, a region with considerably stronger foreign
presence, higher cross-border funding, and elevated
loan-to-deposit ratios compared with the rest of the world.
The paper shows that high foreign ownership per se does not
appear to explain credit response differences to foreign
funding shocks. Rather, there is a stronger response in
countries that exhibit high loan-to-deposit ratios and a
high reliance on foreign funding relative to local deposits.
The results suggest that funding model differences were at
the heart of the post-crisis credit contraction in several
Central and Eastern European countries. These findings have
important regulatory and supervisory implications for
emerging countries in Central and Eastern Europe as well as
for other countries. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Feyen, Erik Letelier, Raquel Love, Inessa Maimbo, Samuel Munzele Rocha, Roberto |
| author_facet |
Feyen, Erik Letelier, Raquel Love, Inessa Maimbo, Samuel Munzele Rocha, Roberto |
| author_sort |
Feyen, Erik |
| title |
The Impact of Funding Models and Foreign Bank Ownership on Bank Credit Growth : Is Central and Eastern Europe Different? |
| title_short |
The Impact of Funding Models and Foreign Bank Ownership on Bank Credit Growth : Is Central and Eastern Europe Different? |
| title_full |
The Impact of Funding Models and Foreign Bank Ownership on Bank Credit Growth : Is Central and Eastern Europe Different? |
| title_fullStr |
The Impact of Funding Models and Foreign Bank Ownership on Bank Credit Growth : Is Central and Eastern Europe Different? |
| title_full_unstemmed |
The Impact of Funding Models and Foreign Bank Ownership on Bank Credit Growth : Is Central and Eastern Europe Different? |
| title_sort |
impact of funding models and foreign bank ownership on bank credit growth : is central and eastern europe different? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/02/19007915/impact-funding-models-foreign-bank-ownership-bank-credit-growth-central-eastern-europe-different http://hdl.handle.net/10986/17341 |
| _version_ |
1764436910473740288 |
| spelling |
okr-10986-173412021-04-23T14:03:37Z The Impact of Funding Models and Foreign Bank Ownership on Bank Credit Growth : Is Central and Eastern Europe Different? Feyen, Erik Letelier, Raquel Love, Inessa Maimbo, Samuel Munzele Rocha, Roberto ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES AFFILIATES ASSETS AUSTRIAN NATIONAL BANK AUTOREGRESSION BALANCE SHEET BALANCE SHEETS BANK CREDIT BANK CREDIT GROWTH BANK DEPOSITS BANK LENDING BANK LENDING BEHAVIOR BANK LIABILITIES BANK OWNERSHIP BANK REGULATION BANKING ASSETS BANKING CRISIS BANKING RESTRUCTURING BANKING SECTOR BANKING SYSTEM BANKING SYSTEM ASSETS BANKING SYSTEMS BENCHMARK BONDS BORROWING BORROWINGS CAPITAL MARKETS CAPITALIZATION CENTRAL BANK CENTRAL BANKS CONTAGION CREDIT ACCESS CREDIT CRUNCH CREDIT FLOWS CREDIT GROWTH CREDIT INFORMATION CREDIT PROVISION CROSS-BORDER BANKING DEFLATORS DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT BASE DEPOSIT FUNDING DEPOSIT GROWTH DEPOSITORY DEPOSITS DEPOSITS ACCOUNT DERIVATIVES DEVELOPMENT POLICY DOMESTIC BANK DOMESTIC BANKING DOMESTIC BANKS DOMESTIC DEPOSIT DOMESTIC DEPOSITS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC SHOCKS EMERGING MARKET ECONOMIES EMERGING MARKETS ENDOGENOUS VARIABLES EXCHANGE RATE EXPORTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL GLOBALIZATION FINANCIAL INTEGRATION FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FOREIGN BANK FOREIGN BANKS FOREIGN LIABILITIES FOREIGN LIABILITY FOREIGN OWNERSHIP FUNDING SOURCE FUNDING SOURCES GDP GDP DEFLATOR GROSS DOMESTIC PRODUCT GROWTH RATE HOUSEHOLDS INSTITUTIONAL FRAMEWORKS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL BANKING INTERNATIONAL BANKS INTERNATIONAL FINANCIAL CRISES INTERNATIONAL FINANCIAL STATISTICS LIABILITIES DEPOSITS LIQUID ASSETS LIQUIDITY LIQUIDITY POSITION LIQUIDITY SHOCK LOAN LOAN MARKET LOAN-TO-DEPOSIT RATIO LOAN-TO-DEPOSIT RATIOS M1 MACROECONOMIC POLICIES MARKET ECONOMIES MORTGAGE MULTINATIONAL NATIONAL BANK NATIONAL BANK OF SLOVAKIA PRIVATE CREDIT REAL GDP REGULATORY AUTHORITIES REGULATORY FRAMEWORK REMITTANCES RESTRUCTURING PROGRAMS RISK FACTORS RULE OF LAW SAVINGS SAVINGS DEPOSITS SECURITIES SOLVENCY SUBSIDIARIES SUBSIDIARY SUPERVISION EQUITY SUPPLY OF CREDIT SURCHARGES TERM CREDIT UNION WHOLESALE FUNDING This paper provides new evidence on the factors affecting protracted credit contraction in the wake of the global financial crisis. The paper applies panel vector autoregressions to a global panel that consists of quarterly data for 41 countries for the period 2000-2011 and documents that domestic private credit growth is highly sensitive to cross-border funding shocks around the world. This relationship is significantly stronger in Central and Eastern Europe, a region with considerably stronger foreign presence, higher cross-border funding, and elevated loan-to-deposit ratios compared with the rest of the world. The paper shows that high foreign ownership per se does not appear to explain credit response differences to foreign funding shocks. Rather, there is a stronger response in countries that exhibit high loan-to-deposit ratios and a high reliance on foreign funding relative to local deposits. The results suggest that funding model differences were at the heart of the post-crisis credit contraction in several Central and Eastern European countries. These findings have important regulatory and supervisory implications for emerging countries in Central and Eastern Europe as well as for other countries. 2014-03-18T21:54:13Z 2014-03-18T21:54:13Z 2014-02 http://documents.worldbank.org/curated/en/2014/02/19007915/impact-funding-models-foreign-bank-ownership-bank-credit-growth-central-eastern-europe-different http://hdl.handle.net/10986/17341 English en_US Policy Research Working Paper;No. 6783 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia Europe Eastern Europe |