Do capital flows change domestic credit allocation?

Samarina, Anna; Bezemer, Dirk

doi:10.1016/j.jimonfin.2015.12.013

Cited by 52 publications

(39 citation statements)

References 37 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…A promising avenue to explore the reasons for this difference would be to analyze industry destinations of capital flows, and types of capital flows. For instance, Samarina and Bezemer (2016) find that foreign capital inflows into the nonbank sector (but not into the bank sector) are associated with lower shares of business lending in domestic bank portfolios. Also, if foreign capital flows into economies with few investment opportunities, it may substitute for domestic bank lending to non-financial business, so that bank balance sheets become more dominated by household lending.…”

Section: Estimation Resultsmentioning

confidence: 99%

“…Capital inflows could raise investment and credit demand by non-financial firms in the tradable sector, provided that repayment is assured by future export profits (Lucas, 1990;Blanchard and Giavazzi, 2002). Some (but not all) capital inflows may cause increased home mortgage lending (Samarina and Bezemer, 2016 Fifth, financial factors such as credit market deregulation have resulted in a loosening of mortgage lending rules (Dell'Ariccia et al, 2012;Jorda et al, 2016), often in conjunction with policy-induced trends in home ownership rates (Maddaloni and Peydro, 2011). The resulting securitization and originate-to-distribute lending trends favor mortgage lending (Purnanandam, 2011;Jiminez et al, 2014;Favara and Imbs, 2015).…”

Section: Factors Driving Credit Allocationmentioning

confidence: 99%

See 1 more Smart Citation

The Shift in Bank Credit Allocation: New Data and New Findings

2017

Self Cite

View full text Add to dashboard Cite

In this paper we present a new data set on bank credit in four categories: home mortgages, consumer credit, bank loans to non-bank financials, and loans to nonfinancial business, for 74 economies over 1990-2013. We offer a full description of sources and methods of data collection and construction and comparisons with adjacent data sets. We document key trends including the shift in bank credit allocation away from traditional business lending. The literature suggests substantial consequences of this 'debt shift' for growth, income distribution and macroeconomic resilience, which motivated this data construction. A second contribution is to analyze drivers of debt shift in fixed-effects and system-GMM regressions for the full sample and separately for advanced and emerging economies. We find that debt shift is larger in advanced economies with a stronger presence of foreign banks and higher trade. Financial deregulation strongly correlates with debt shift.

show abstract

Section: Estimation Resultsmentioning

confidence: 99%

Section: Factors Driving Credit Allocationmentioning

confidence: 99%

The Shift in Bank Credit Allocation: New Data and New Findings

2017

Self Cite

View full text Add to dashboard Cite

show abstract

“…Samarina and Bezemer () argue that capital flow controls can be implemented to tame massive capital inflows. However, such measures need to consider the effect of capital inflows on growth and financial system stability, and the importance of sectoral destination in determining the effects of capital flows.…”

Section: Capital Flows Volatility – a Challenge For Monetary And Macrmentioning

confidence: 99%

“…This finding differs from those reported in earlier studies by De Gregorio et al (2000), who argue that the effect of reserve requirements in terms of restraining capital inflows is limited, although they may alter the composition of capital inflows, from short term to long term. Samarina and Bezemer (2016) argue that capital flow controls can be implemented to tame massive capital inflows. However, such measures need to consider the effect of capital inflows on growth and financial system stability, and the importance of sectoral destination in determining the effects of capital flows.…”

Section: Capital Flows Volatility -A Challenge For Monetary and Macromentioning

confidence: 99%

What Can We Learn From the Implementation of Monetary and Macroprudential Policies: A Systematic Literature Review

Lubis

Alexiou

Nellis

2019

Journal of Economic Surveys

View full text Add to dashboard Cite

The emergence of macroprudential policies, implemented by central banks as a means of promoting financial stability, has raised many questions regarding the interaction between monetary and macroprudential policies. Given the limited number of studies available, this paper sheds light on this issue by providing a critical and systematic review of the literature. To this end, we divide the theoretical and empirical studies into two broad channels of borrowers – consisting of the cost of funds and the collateral constraint – and financial intermediaries – consisting of risk‐taking and payment systems. In spite of the existing ambiguity surrounding coordination issues between monetary and macroprudential policies, it is argued that monetary policy alone is not sufficient to maintain macroeconomic and financial stability. Hence, macroprudential policies are needed to supplement monetary. In addition, we find that the role of the exchange rate is critical in the implementation of monetary and macroprudential policies in emerging markets, while volatile capital flows pose another challenge. In so far as how the arrangement of monetary and macroprudential policies varies across countries, key theoretical and policy implications have been identified.

show abstract

“…These domestic financial mechanisms are also affected by the strength and direction of international capital flows. Before the crisis, capital inflows enabled peripheral countries to finance large current account deficits and amplified the credit boom (Lane and McQuade, 2014;Samarina and Bezemer, 2016). By contrast, the financial fragmentation during the crisis (Baldwin and Giavazzi, 2015) was accompanied by capital outflows that acceler-ated and amplified the adjustment of current accounts (Martin and Philippon, 2017).…”

Section: Mechanisms and Causesmentioning

confidence: 99%

Financial Factors in the Economic and Monetary Union

Hessel¹

View full text Add to dashboard Cite

With this thesis a long-term desire has been fulfilled. Despite my deliberate choice to leave university and start working in the "real world" after I graduated, the idea to pursue a PhD always remained with me. I nevertheless shied away from openly starting such an ambitious grand project, and took a cautious approach instead. After a number of published and unpublished attempts over the years, the financial crisis and the sovereign debt crisis provided the inspiration for a clearly defined topic. Most economist will vividly remember this fascinating period, when conventional wisdoms were questioned and many new ideas took hold. In retrospect, writing a thesis certainly was not as difficult as I had feared, even though it took more time than I had hoped. Combining a thesis with daily policy work is a challenge, but doing this at DNB was a tremendous privilege. I took inspiration from the natural interaction between policy and research at DNB, and from the many colleagues that are familiar with and sympathetic to such a project. One particular example has been organizing a workshop on gross capital flows with Jolanda Peeters and Neeltje van Horen. The speech I wrote for that occasion contained several elements that form the heart of this thesis. I would also like to thank Job Swank, Paul Hilbers, Peter van Els, Christiaan Pattipeilohy and Saskia de Vries for their encouragement and for giving me time to-sometimes-prioritize research over policy. This thesis would not have been finished without the help of my supervisors, Jakob de Haan and Steven Brakman. Jakob's optimism and ability to have faith in people led to a natural assumption that I would manage and boosted my confidence. Steven has an eagle eye for texts and lines of reasoning that are not fully clear, which helped greatly to further improve my papers. I also want to express my gratitude to my co-authors. Leo de Haan and Jan Willem van den End for their work ethic and talent to channel ideas into a clear empirical strategy. Our cooperation made me realize that I was able to make valuable contributions to genuine research. Thanks also to Mariarosaria Comunale for her strong econometric skills and her continuous enthusiasm in tackling a topic that was quite unexplored and therefore not so clearly defined at the time. And finally Niels Gilbert for the countless fruitful discussions on EMU in our shared office, which have led to many policy notes, articles, papers and still unexplored ideas. Martin Admiraal and René Bierdrager provided excellent data assistance. Many thanks also go to the colleagues at the Raad van State (Council of State). Two secondments there helped me to look at EMU from other angles than just the economic one, and made me realize that the knowledge acquired with my academic work was also useful for policy advice to Dutch Parliament. In addition, I am grateful to the members of the assessment committee, Paul de Grauwe, Harry Garretsen and Kees Koedijk, for their willingness to read and comment on my manuscript. Finally, the contribution ...

show abstract

Do capital flows change domestic credit allocation?

Cited by 52 publications

References 37 publications

The Shift in Bank Credit Allocation: New Data and New Findings

The Shift in Bank Credit Allocation: New Data and New Findings

What Can We Learn From the Implementation of Monetary and Macroprudential Policies: A Systematic Literature Review

Financial Factors in the Economic and Monetary Union

Contact Info

Product

Resources

About