How will Basel II affect bank lending to emerging markets? An analysis based on German bank level data

Thilo Liebig (), Daniel Porath, Beatrice Weder and Michael Wedow ()

No 2004,05, Discussion Paper Series 2: Banking and Financial Studies from Deutsche Bundesbank, Research Centre

Abstract: This paper investigates whether the new Basel Accord will induce a change in bank lending to emerging markets using a comprehensive new data set on German banks` foreign exposure. We test two interlinked hypotheses on the conditions under which the change in the regulatory capital would leave lending flows unaffected. This would be the case if (i) the new regulatory capital requirement remains below the economic capital and (ii) banks’ economic capital to emerging markets already adequately reflects risk. On both accounts the evidence indicates that the new Basel Accord should have a limited effect on lending to emerging markets.

Keywords: Basel Accord; Banking Regulation; International Lending (search for similar items in EconPapers)
JEL-codes: F33 F34 G28 (search for similar items in EconPapers)
Date: 2004
View list of references View citations in EconPapers

Downloads: (external link)
http://opus.zbw-kiel.de/volltexte/2006/4254/pdf/200405dkp_b.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this paper

More papers in Discussion Paper Series 2: Banking and Financial Studies from Deutsche Bundesbank, Research Centre
Contact information at EDIRC.
Series data maintained by ZBW - German National Library for Economics ().