Foreign Banks and the Vienna Initiative: Turning Sinners into Saints?

Ralph De Haas, Yevgeniya Korniyenko, Elena Loukoianova () and Alexander Pivovarsky
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Yevgeniya Korniyenko: Bank of England
Alexander Pivovarsky: European Bank for Reconstruction and Development (EBRD)

No 62, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: We use data on 1,294 banks in Emerging Europe to analyze how bank ownership and the so-called Vienna Initiative impacted credit growth during the 2008-09 crisis. As part of the Vienna Initiative western European banks signed country-specific commitment letters in which they pledged to maintain exposures and to support their subsidiaries in Emerging Europe. We show that in general both domestic and foreign banks sharply curtailed credit during the crisis, but that foreign banks that participated in the Vienna Initiative were relatively stable lenders. We find no evidence of negative spillovers from countries where banks signed commitment letters to countries where they did not.

Keywords: Foreign banks; Vienna Initiative; financial crisis; state support (search for similar items in EconPapers)
JEL-codes: C23 F36 G21 P34 (search for similar items in EconPapers)
Pages: 32
Date: 2012-03
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (61)

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Working Paper: Foreign Banks and the Vienna Initiative: Turning Sinners Into Saints? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:62

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