Shock Contagion, Asset Quality and Lending Behavior
Oleksandr Talavera and
No 01/2018, Working Papers from National Bank of Ukraine
We use the geopolitical conflict in eastern Ukraine as a negative shock to bank assets and examine the shock's impact on the banking sector. We find banks were more severely affected by the conflict if they had more loans outstanding in the conflict areas before the shock. These banks, consequently, are more likely to experience an increase in troubled assets and a reduction in credit supply. Further analysis offers evidence of the "flight to headquarters" effect in credit allocation wherein more affected banks cut lending by a greater amount in markets located farther from headquarters.
Keywords: geopolitical shock; credit allocation; asset quality; flight to headquarters; difference-in-differences (search for similar items in EconPapers)
JEL-codes: G01 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-cis and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Working Paper: Shock contagion, asset quality and lending behavior (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ukb:wpaper:01/2018
Access Statistics for this paper
More papers in Working Papers from National Bank of Ukraine Contact information at EDIRC.
Bibliographic data for series maintained by Research Unit ().