Internal Capital Markets and Lending by Multinational Bank Subsidiaries

Ralph De Haas and Iman Lelyveld

MPRA Paper from University Library of Munich, Germany

Abstract: We use new panel data on the intra-group ownership structure and the balance sheets of 45 of the largest multinational bank holdings to analyze what determines the credit growth of their subsidiaries. We find evidence for the existence of internal capital markets through which multinational banks manage the credit growth of their subsidiaries. Multinational bank subsidiaries with financially strong parent banks are able to expand their lending faster. As a result of parental support, foreign bank subsidiaries also do not need to rein in their credit supply during a financial crisis, while domestic banks need to do so.

Keywords: multinational banks; credit supply; internal capital markets; financial crisis (search for similar items in EconPapers)
JEL-codes: F15 F23 F36 G21 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Related works:
Journal Article: Internal capital markets and lending by multinational bank subsidiaries (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13164

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