No More Credit to Europe? Cross-Border Bank Lending, Financial Integration, and the Rebirth of the National Scale as a Credit Scorecard

10.1068/a4618 ◽  
2013 ◽  
Vol 45 (10) ◽  
pp. 2399-2419 ◽  
Author(s):  
David Bassens ◽  
Michiel van Meeteren ◽  
Ben Derudder ◽  
Frank Witlox
Keyword(s):  
Financial Integration ◽  
Bank Lending ◽  
National Scale ◽  
Cross Border

Economic and financial integration and the rise of cross-border M&As

2011 ◽  
pp. 296-322 ◽  
Author(s):  
S. Brakman ◽  
G. Garita ◽  
H. Garretsen ◽  
C. Van Marrewijk
Keyword(s):  
Financial Integration ◽  
Cross Border

scholarly journals How does the interaction of macroprudential and monetary policies affect cross-border bank lending?

2019 ◽  
Vol 2019 (045) ◽  
Author(s):  
Előd Takáts ◽  
Judit Temesvary ◽  
Keyword(s):  
Bank Lending ◽  
Monetary Policies ◽  
Cross Border

A Decade After the 2009 Global Recession: Macroeconomic Developments

2021 ◽  
pp. 2150011
Author(s):  
Wee Chian Koh ◽  
Shu Yu
Keyword(s):  
Low Income ◽  
Developing Economies ◽  
Emerging Market ◽  
Bank Lending ◽  
Low Income Countries ◽  
Short Term ◽  
Fiscal Stimulus ◽  
Cross Border ◽  
Global Recession ◽  
The Impact

Emerging market and developing economies (EMDEs) weathered the 2009 global recession relatively well. However, the impact of the global recession varied across economies. EMDEs with stronger pre-crisis fundamentals — such as large foreign exchange reserves, sound fiscal positions, and low inflation — suffered milder growth slowdowns, in part due to their greater capacity to engage in monetary and fiscal stimulus. Low-income countries were also resilient, as foreign aid and inflows of remittances remained relatively stable. In contrast, EMDEs that were heavily dependent on short-term capital flows — such as portfolio investment and cross-border bank lending — fared less well, especially those in Europe and Central Asia. A key lesson for EMDEs is the need to strengthen macroeconomic frameworks and create policy space to prepare for future global downturns.

A Framework for Regional Banking Regulation in ASEAN

2020 ◽  
Vol 19 (3) ◽  
pp. 111-125
Author(s):  
Peter J. Morgan
Keyword(s):  
Capital Flows ◽  
Deposit Insurance ◽  
Financial Regulation ◽  
Financial Integration ◽  
Banking Regulation ◽  
Safety Net ◽  
Regional Level ◽  
Cross Border ◽  
Banking Institutions ◽  
Financial Safety Net

This paper argues that there is a role for regional-level institutions of banking regulation in the ASEAN region. This is particularly important in an environment of increasing financial integration and harmonization, including exposures to shocks from volatile capital flows and cross-border banking institutions. The paper examines four aspects of financial regulation: microprudential regulation, macroprudential regulation, resolution capacity and deposit insurance, and a financial safety net. The paper argues that EU regional banking regulation provides a useful reference point, but the lower degree of credit market openness in ASEAN implies that a more nuanced approach can be adopted, and makes specific recommendations.

Spillovers of the United States’ Unconventional Monetary Policy to Emerging Asia

2019 ◽  
pp. 118-145
Author(s):  
Ying Xu ◽  
Hai Anh La
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Bank Lending ◽  
The United States ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
Bank Lending Channel ◽  
Lending Channel ◽  
Cross Border ◽  
Syndicated Loan Market

This chapter assesses the spillover effects of the United States’ unconventional monetary policy on the Asian credit market. With a focus on cross-border bank lending, it employs firm-level loan data with regard to the syndicated loan market and measures the international bank lending channel through changes in United States dollar-denominated loans extended to Asian borrowers. It finds that the growth of dollar credit in Asia increased substantially in response to quantitative easing in the US financial market. The results of this study confirm the existence of the bank lending channel in Asia and emphasize the role of credit flows in transmitting financial conditions. The chapter also provides new evidence of cross-border liquidity spillover in the syndicated loan market. It finds that the overall spillover effect was large but differed significantly in Asia by types of borrowing firms, financing purposes, and loan terms at different stages of the quantitative easing programmes.

scholarly journals The Dollar, Bank Leverage, and Deviations from Covered Interest Parity

2019 ◽  
Vol 1 (2) ◽  
pp. 193-208 ◽  
Author(s):  
Stefan Avdjiev ◽  
Wenxin Du ◽  
Cathérine Koch ◽  
Hyun Song Shin
Keyword(s):  
Capital Markets ◽  
Risk Taking ◽  
Bank Lending ◽  
Global Capital ◽  
Cross Border ◽  
Covered Interest Parity ◽  
Interest Parity ◽  
Triangular Relationship

We document a triangular relationship in that a stronger dollar goes hand in hand with larger deviations from covered interest parity (CIP) and contractions of cross-border bank lending in dollars. We argue that underpinning the triangle is the role of the dollar as a key barometer of risk-taking capacity in global capital markets. (JEL F23, F31, G15, G21)

Default of Systemically Important Financial Intermediaries: Short-term Stability versus Incentive Compatibility?

2013 ◽  
Vol 14 (1) ◽  
pp. 15-30 ◽  
Author(s):  
Andreas Dombret ◽  
André Ebner
Keyword(s):  
Financial Institutions ◽  
Financial Stability ◽  
Financial Integration ◽  
Incentive Compatibility ◽  
Financial Intermediaries ◽  
Entry And Exit ◽  
Short Term ◽  
Market Participants ◽  
Cross Border ◽  
Crucial Feature

Abstract Financial integration and globalization have acted as a major stimulus in the development of large, internationally operating banks, which not only provide cross-border services but also have a local presence. While these banks are themselves drivers of economic integration, they can pose serious threats to financial stability. Their size, interconnectedness and importance as providers of specific services mean that financial institutions can be too-systemic-to-fail (TSTF). Since the entry and exit of market participants is a crucial feature of well-functioning markets, the absence of any credible possibility of failure leads to serious distortions. This analysis gives an overview of the TSTF problem and discusses the challenges to be faced in establishing credible resolution regimes.

scholarly journals US vs. euro area: Who drives cross-border bank lending to EMs?

2020 ◽  
Vol 57 ◽  
pp. 101090
Author(s):  
Eugenio Cerutti ◽  
Carolina Osorio-Buitron
Keyword(s):  
Euro Area ◽  
Bank Lending ◽  
Cross Border

Impact of Eurozone crisis on domestic bank lending in India

2020 ◽  
Vol 12 (4) ◽  
pp. 577-591
Author(s):  
Vighneswara Swamy
Keyword(s):  
Emerging Economies ◽  
Debt Crisis ◽  
Bank Lending ◽  
Eurozone Crisis ◽  
Financial Shocks ◽  
Content Type ◽  
Crisis Period ◽  
Cross Border ◽  
International Banks ◽  
The Impact

Purpose The significant economic weight of the Eurozone in the globe caused the contagion of the Eurozone debt crisis on the emerging markets. The Eurozone debt crisis caused the sudden plummeting of the cross-border bank credit (BC) to India causing a significant impact on bank lending in India. Essentially, the purpose of this study is to find an answer to the question: Did the decline in cross-border cross-credit from Eurozone had an impact on domestic BC in India? Design/methodology/approach Using the data for the period from 2000 to 2013 sourced from Bank for International Settlements international banking statistics consolidated data sets, the novel specification of the study captures the impact of Eurozone cross-border credit on India by developing two regression frameworks that capture the pre-Euro debt crisis period scenario and post-Euro debt crisis period scenario. Findings The results offer a very interesting analogy of the behavior of BC and cross-border credit during the pre and post-Eurozone crisis scenarios of analysis. During the pre-Eurozone crisis period, cross-border credit displayed a significant negative relationship with BC indicating that cross-border credit to the Indian firms indirectly benefitted the banks by creating increased demand for domestic BC. The post-Eurozone crisis period witnessed a nexus between cross-border credit and BC during the pre-Eurozone crisis period, which gradually disappeared largely because of the onset of the Eurozone crisis. Originality/value This study is a first of its kind in investigating the impact of the Eurozone crisis on an emerging economy like India. This study supports the hypothesis of the existence of the transmission of financial shocks through the balance sheets of international banks. The findings conform to the policy concerns of most of the emerging economies that international banks transmit financial shocks from their home countries. The implication for India and other emerging economies is that international credit growth deserves careful monitoring.

scholarly journals Shock Transmission Through Cross-Border Bank Lending: Credit and Real Effects

2019 ◽  
Vol 33 (10) ◽  
pp. 4839-4882 ◽  
Author(s):  
Galina Hale ◽  
Tümer Kapan ◽  
Camelia Minoiu
Keyword(s):  
Bank Lending ◽  
Banking Crises ◽  
Financial Networks ◽  
Financial Shocks ◽  
Real Effects ◽  
Cross Border ◽  
International Bank ◽  
Idiosyncratic Shocks ◽  
Shock Transmission ◽  
Using Data

Abstract We study the transmission of financial shocks across borders through international bank connections. Using data on cross-border interbank loans among 6,000 banks during 1997–2012, we estimate the effect of asset-side exposures to banks in countries experiencing systemic banking crises on profitability, credit, and the performance of borrower firms. Crisis exposures reduce bank returns and tighten credit conditions for borrowers, constraining investment and growth. The effects are larger for foreign borrowers, including in countries not experiencing banking crises. Our results document the extent of cross-border crisis transmission, but also highlight the resilience of financial networks to idiosyncratic shocks.

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