Foreign bank lending during COVID-19

Yusuf Emre Akgündüz, Seyit Mümin Cılasun, H. Özlem Dursun-de Neef, Yavuz Selim Hacıhasanoğlu and Ibrahim Yarba

Journal of Banking & Finance, 2025, vol. 178, issue C

Abstract: We study whether foreign banks’ exposure to the pandemic in their home countries affected their lending in Türkiye. Although foreign banks issued more loans than domestic banks, the ones with higher exposure to the pandemic decreased their lending significantly: 1 percentage point higher number of deaths per thousand people in their home countries led to an almost 0.5 percent reduction in lending. This reduction was alleviated by the fiscal support provided in their home countries. Our results support an international spillover of the pandemic shock and the implemented fiscal policies via banks.

Keywords: Foreign banks; COVID-19 pandemic; Bank loan supply; International transmission of shocks (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:178:y:2025:i:c:s0378426625001086

DOI: 10.1016/j.jbankfin.2025.107488

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