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The impact of regulatory requirements on the banking flows to emerging countries

Samira Hellou () and Michel Boutillier ()

No 2017-9, EconomiX Working Papers from University of Paris West - Nanterre la Defense, EconomiX

Abstract: The strengthening of regulatory requirements, along with evolution in banking regulations, can have a negative impact on the external bank financing of emerging countries heavily dependent on this type of financing. Indeed, several studies have aroused fears about the potential effects of significant regulatory adjustments on bank lending to emerging markets. This paper presents a trial to estimate the sensitivity of the banking flows to increased regulatory requirements. We adopt a macroeconomic approach based on the determinants of cross-border banking claims flows from banks located in 19 developed countries to 37 emerging countries. The results of the GMM estimation confirm the negative impact of regulatory requirements on the banking flows to emerging countries, the significant impact of business openness and the negative effect of bank financialization on banking flows to these countries. The results also show that countries rated as speculative grade are influenced by the regulatory requirements, unlike countries rated in investment grade category.

Keywords: Banking flows; emerging countries; pull and push factors; regulatory requirements. (search for similar items in EconPapers)
JEL-codes: F21 F34 G18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban
Date: 2017
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Related works:
Working Paper: The impact of regulatory requirements on the banking flows to emerging countries (2017)
Working Paper: The impact of regulatory requirements on the banking flows to emerging countries (2017)
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