International banking and liquidity risk transmission: Lessons from across countries

Claudia Buch and Linda Goldberg

No 17/2014, Discussion Papers from Deutsche Bundesbank

Abstract: Activities of international banks have been at the core of discussions on the causes and effects of the international financial crisis. Yet, we know little about the actual magnitudes and mechanisms for transmission of liquidity shocks through international banks, including the reasons for heterogeneity in transmission across banks. The International Banking Research Network (IBRN), established in 2012, brings together researchers from around the world with access to micro-data on individual banks to analyze issues pertaining to global banks. This paper summarizes the common methodology and results of empirical studies conducted in 11 countries to explore liquidity risk transmission. Among the main results is, first, that explanatory power of the empirical model is higher for domestic lending than for international lending. Second, how liquidity risk affects bank lending depends on the whether the banks are drawing on official sector liquidity facilities. Third, liquidity management across global banks can be important for liquidity risk transmission into lending. Fourth, there is substantial heterogeneity in the balance sheet characteristics that affect banks' responses to liquidity risk. Overall, bank balance sheet characteristics matter for differentiating lending responses across banks mainly in the realm of cross-border lending.

Keywords: International banking; liquidity; transmission; central bank liquidity; uncertainty; regulation; crises (search for similar items in EconPapers)
JEL-codes: F34 G01 G21 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-ban and nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/100660/1/794263712.pdf (application/pdf)

Related works:
Journal Article: International Banking and Liquidity Risk Transmission: Lessons from Across Countries (2015)
Working Paper: International banking and liquidity risk transmission: lessons from across countries (2014)
Working Paper: International Banking and Liquidity Risk Transmission: Lessons from Across Countries (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:zbw:bubdps:172014

Access Statistics for this paper

More papers in Discussion Papers from Deutsche Bundesbank Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().