Capital account liberalization and the composition of bank liabilities

Luís A.V. Catão and Daniel te Kaat

Journal of International Money and Finance, 2021, vol. 116, issue C

Abstract: Using a sample of almost 600 banks in Latin America, we show that capital account liberalization lowers the share of equity and raises the share of interbank funding in total liabilities of the banking system. These shifts are mostly due to large banks; smaller banks, instead, increase their resort to retail funding by offering higher average deposit interest rates than larger banks. We also find significant differences in the behavior of banks with seemingly greater information opacity. These findings have positive implications for macro-prudential regulation.

Keywords: Capital Account Liberalization; International Capital Flows; Bank Funding and Leverage (search for similar items in EconPapers)
JEL-codes: F32 F36 G21 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Capital Account Liberalization and the Composition of Bank Liabilities (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:116:y:2021:i:c:s0261560621000851

DOI: 10.1016/j.jimonfin.2021.102434

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