International Banking and Liquidity Risk Transmission: Evidence from the United States

Ricardo Correa, Linda Goldberg and Tara Rice

IMF Economic Review, 2015, vol. 63, issue 3, 626-643

Abstract: The balance sheet structure of U.S. banks influences how they respond to liquidity risks. We find the responses differ in fundamental ways across banks without foreign affiliates vs. those with foreign affiliates. Among banks without foreign affiliates, cross-sectional differences in response to liquidity risk depend on the banks’ shares of core deposit funding, Tier 1 capital, and outstanding credit commitments. Among banks with foreign affiliates, the global banks, liquidity management strategies as reflected in internal borrowing and lending across the global organization matter. This intrabank borrowing serves as a shock absorber and affects lending growth to domestic and foreign customers. Across all banks, the use of official sector emergency liquidity facilities tends to reduce the importance of ex ante differences in balance sheets as drivers of cross-sectional differences in lending in response to market liquidity risks.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (48)

Downloads: (external link)
http://www.palgrave-journals.com/imfer/journal/v63/n3/pdf/imfer201528a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/imfer/journal/v63/n3/full/imfer201528a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

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

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:imfecr:v:63:y:2015:i:3:p:626-643

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

Access Statistics for this article

More articles in IMF Economic Review from Palgrave Macmillan, International Monetary Fund
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().