Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates

Why in many economies households and firms borrow and make deposits in foreign currency? Expanding on the existing literature, our framework addresses this question allowing for interest rate differentials and access to foreign funds to play a role in explaining this process of asset substitution or...

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Main Authors:	Basso, Henrique S., Calvo-Gonzalez, Oscar, Jurgilas, Marius
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Monetary Systems Standards Regimes Government and the Monetary System Payment Systems E420 Interest Rates: Determination, Term Structure, and Effects E430 Multinational Firms International Business F230 Banks Other Depository Institutions Micro Finance Institutions Mortgages G210
Online Access:	http://hdl.handle.net/10986/5181

id	okr-10986-5181
recordtype	oai_dc
spelling	okr-10986-51812021-04-23T14:02:21Z Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates Basso, Henrique S. Calvo-Gonzalez, Oscar Jurgilas, Marius Monetary Systems Standards Regimes Government and the Monetary System Payment Systems E420 Interest Rates: Determination, Term Structure, and Effects E430 Multinational Firms International Business F230 Banks Other Depository Institutions Micro Finance Institutions Mortgages G210 Why in many economies households and firms borrow and make deposits in foreign currency? Expanding on the existing literature, our framework addresses this question allowing for interest rate differentials and access to foreign funds to play a role in explaining this process of asset substitution or financial dollarization. Using a newly compiled data set on transition economies and employing a standard panel as well as a panel-VAR methodology we find that increasing access to foreign funds leads to higher credit dollarization, while it decreases deposit dollarization. Interest rate differentials matter for the dollarization of both loans and deposits. 2012-03-30T07:31:41Z 2012-03-30T07:31:41Z 2011 Journal Article Journal of Banking and Finance 03784266 http://hdl.handle.net/10986/5181 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Monetary Systems Standards Regimes Government and the Monetary System Payment Systems E420 Interest Rates: Determination, Term Structure, and Effects E430 Multinational Firms International Business F230 Banks Other Depository Institutions Micro Finance Institutions Mortgages G210
spellingShingle	Monetary Systems Standards Regimes Government and the Monetary System Payment Systems E420 Interest Rates: Determination, Term Structure, and Effects E430 Multinational Firms International Business F230 Banks Other Depository Institutions Micro Finance Institutions Mortgages G210 Basso, Henrique S. Calvo-Gonzalez, Oscar Jurgilas, Marius Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Why in many economies households and firms borrow and make deposits in foreign currency? Expanding on the existing literature, our framework addresses this question allowing for interest rate differentials and access to foreign funds to play a role in explaining this process of asset substitution or financial dollarization. Using a newly compiled data set on transition economies and employing a standard panel as well as a panel-VAR methodology we find that increasing access to foreign funds leads to higher credit dollarization, while it decreases deposit dollarization. Interest rate differentials matter for the dollarization of both loans and deposits.
format	Journal Article
author	Basso, Henrique S. Calvo-Gonzalez, Oscar Jurgilas, Marius
author_facet	Basso, Henrique S. Calvo-Gonzalez, Oscar Jurgilas, Marius
author_sort	Basso, Henrique S.
title	Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates
title_short	Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates
title_full	Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates
title_fullStr	Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates
title_full_unstemmed	Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates
title_sort	financial dollarization : the role of foreign-owned banks and interest rates
publishDate	2012
url	http://hdl.handle.net/10986/5181
_version_	1764394235335802880

Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates

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