How Do Liquidity Conditions Affect U.S. Bank Lending?

Ricardo Correa, Linda Goldberg and Tara N. Rice

No 20141015, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The recent financial crisis underscored the importance of understanding how liquidity conditions for banks (or other financial institutions) influence the banks’ lending to domestic and foreign customers. Our recent research examines the domestic and international lending responses to liquidity risks across different types of large U.S. banks before, during, and after the global financial crisis. The analysis compares large global U.S. banks—that is, those that have offices in foreign countries and are able to move liquidity from affiliates across borders—with large domestic U.S. banks, which have to rely on financing raised in capital markets and from depositors to extend credit and issue loans. One key result of our study, detailed below, is that the internal liquidity management by global banks has, on average, mitigated the effects of aggregate liquidity shocks on domestic lending by these banks.

Keywords: bank; liquidity; global banks; international; lending (search for similar items in EconPapers)
JEL-codes: F00 G2 (search for similar items in EconPapers)
Date: 2014-10-15
References: Add references at CitEc
Citations:

Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2014 ... us-bank-lending.html (text/html)

Related works:
Working Paper: How Do Liquidity Conditions Affect U.S. Bank Lending? (2014)
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:fip:fednls:86987

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().