The mix of international banks'foreign claims: determinants and implications

Alicia García-Herrero () and María Martínez-Pería ()
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Alicia García-Herrero: Banco de España
María Martínez-Pería: World Bank
Authors registered in the RePEc Author Service: Alicia Garcia Herrero and Maria Soledad Martinez Peria

No 525, Working Papers from Banco de España

Abstract: This paper analyzes the determinants and implications for financial stability of the mix of international banks' claims countries receive. In particular, we distinguish between local claims, extended by international banks through their affiliates in a host (or claim recipient) country, and cross border claims, booked from outside the host country, typically from banks' headquarters in their home countries. Using data on US, Spanish, and Italian banks' foreign claims across countries, we find that the share of local foreign claims is primarily driven by the degree of "freedom" in the host banking sector and by business opportunities in the local market. Entry requirements, startup and informational costs associated with international banking also play a role, but their influence is less robust. Finally, we find that the mix of international bank claims has implications for financial stability, since foreign claim volatility is lower in countries that receive a larger share of local claims.

Keywords: foreign bank financing; financial fdi; cross-border claims (search for similar items in EconPapers)
JEL-codes: F36 F37 G21 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2005-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... o/05/Fic/dt0525e.pdf First version, August 2005 (application/pdf)

Related works:
Journal Article: The mix of international banks' foreign claims: Determinants and implications (2007)
Working Paper: The mix of international bank\'s foreign claims: Determinants and implications (2005)
Working Paper: The mix of international banks'foreign claims: determinants and implications (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0525

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