Financial crises and the composition of cross-border lending

Eugenio Cerutti, Galina Hale and Camelia Minoiu

Journal of International Money and Finance, 2015, vol. 52, issue C, 60-81

Abstract: We examine the composition and drivers of cross-border bank lending between 1995 and 2012, distinguishing between syndicated and non-syndicated loans. We show that on-balance sheet syndicated loan exposures, which account for almost one third of total cross-border loan exposures, increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis. Our empirical analysis of the drivers of cross-border loan exposures in a large bilateral dataset leads to three main results. First, banks with lower levels of capital favor syndicated over other kinds of cross-border loans. Second, borrower country characteristics such as level of development, economic size, and capital account openness, are less important in driving syndicated than non-syndicated loan activity, suggesting a diversification motive for syndication. Third, information asymmetries between lender and borrower countries became more binding for both types of cross-border lending activity during the recent crisis.

Keywords: Cross-border banking; Syndicated loans; Global financial crisis; BIS international banking statistics; Dealogic Loan Analytics (search for similar items in EconPapers)
JEL-codes: F30 G15 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (60)

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Related works:
Working Paper: Financial Crises and the Composition of Cross-Border Lending (2023)
Working Paper: Financial Crises and the Composition of Cross-Border Lending (2014)
Working Paper: Financial Crises and the Composition of Cross-Border Lending (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:52:y:2015:i:c:p:60-81

DOI: 10.1016/j.jimonfin.2014.11.013

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