 Drivers of cross-border banking exposures during the crisisJournal of Banking & Finance, 2015, vol. 55, issue C, 340-357 Abstract: The recent crisis highlighted the role of cross-border banking linkages. This paper analyzes these linkages through an examination of both banking systems’ foreign credit exposures and borrower countries’ reliance on foreign bank credit. It does this by combining BIS data with bank-level data. The results indicate that the proposed refinements on measuring those two exposures are important, especially when foreign bank affiliates’ funding relies heavily on local deposits. After developing novel and necessary break-in-series and exchange rate variation adjustments, estimations looking at the driving factors of both measures during 2006–2012 highlight: (i) the role of systemic banking crises and global financial conditions in the evolution of banks’ foreign credit exposures; (ii) the role of a larger set of factors in the case of the evolution of borrower countries’ reliance on foreign bank credit—how countries borrowed, from whom they borrowed, and global financial and domestic demand conditions. Keywords: Cross-border banking linkages; Financial crisis; Contagion; Vulnerabilities (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:55:y:2015:i:c:p:340-357 DOI: 10.1016/j.jbankfin.2014.08.021 Access Statistics for this article Journal of Banking & Finance is currently edited by Ike Mathur More articles in Journal of Banking & Finance from Elsevier |
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