Foreign Bank Behavior during Financial Crises

Jonathon Adams‐kane, Julian Caballero and Jamus Lim
Authors registered in the RePEc Author Service: Jonathon Adams-Kane

Journal of Money, Credit and Banking, 2017, vol. 49, issue 2-3, 351-392

Abstract: This paper studies whether lending by foreign banks is affected by financial crises. We pair a bank‐level data set of foreign ownership with information on banking crises and examine whether the credit supply of majority foreign‐owned banks that underwent home‐country crises differ systematically from those of other foreign banks. In contrast to the literature, our broad global coverage allows us to exploit variations between foreign banks; this enables us to identify an average treatment effect directly attributable to crises. Our baseline results show that banks exposed to home‐country crises between 2007–08 exhibit changes in lending patterns that are lower by between 13% and 42% than their noncrisis counterparts. This finding is robust to potential alternative explanations, and also holds, though less strongly, for the 1997/98 Asian crisis.

Date: 2017
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Citations: View citations in EconPapers (8)

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https://doi.org/10.1111/jmcb.12382

Related works:
Working Paper: Foreign Bank Behavior during Financial Crises (2014)
Working Paper: Foreign bank behavior during financial crises (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:49:y:2017:i:2-3:p:351-392

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