Multinational Banks and the Global Financial Crisis: Weathering the Perfect Storm?

Haas, Ralph De; Lelyveld, Iman van

doi:10.2139/ssrn.1964103

Cited by 94 publications

(111 citation statements)

References 78 publications

(29 reference statements)

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“…Considering that recent empirical contributions cast much doubt on the ability of foreign bank subsidiaries to act as shock absorbers in host countries [36,73], we are led to conclude that the strategy of a considerable entry of foreign banks in local credit markets has not guaranteed the supposed positive effects on financial innovation and development and, ultimately, economic growth in host countries.…”

Section: Baseline Resultsmentioning

confidence: 88%

“…A similar issue refers to descriptive statistics, discussed in a later part of this section. subsidiaries is negatively exposed to shocks to parent banks, either firm-specific or systematic [67][68][69][70][71][72][73]. In particular, the recent global financial crisis has challenged the idea that multinational banks play a positive role as shock absorbers in local markets; with reference to emerging European countries foreign subsidiaries were found to cut lending more than domestic banks and that this effect was more pronounced when the parent bank was financially weak [38,70,73].…”

Section: Methodsmentioning

confidence: 99%

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Financial Development and Economic Growth: The Role of Foreign-Owned Banks in CESEE Countries

et al. 2017

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This study focuses on the role of financial development in the economic growth of Central, Eastern and South-Eastern European (CESEE) countries in the post-communist era (1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014), which coincides with the opening up of financial markets to foreign investors and the global financial crisis. We investigate whether economic growth in CESEE countries has benefited from the presence of foreign-owned banks. To this end, we introduce some refined measures of financial development and control for banks' financial strength. Our results challenge the idea that bank credit fosters economic growth and that foreign-owned banks are indisputably a positive addition to local markets able to foster economic growth.

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Section: Baseline Resultsmentioning

confidence: 88%

Section: Methodsmentioning

confidence: 99%

Financial Development and Economic Growth: The Role of Foreign-Owned Banks in CESEE Countries

et al. 2017

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“…Before the global financial crisis, the CGFS (2004) and others stressed the benefits that foreign banks could confer on local markets. Since the crisis, de Haas and van Lelyveld (2013), for instance, focus on how foreign banks taking losses elsewhere could crunch local credit.…”

Section: Consolidated Banking Market Integrationmentioning

confidence: 99%

Is China or India more financially open?

Ma¹,

McCauley

2013

Journal of International Money and Finance

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“…Our paper adds to the strand of literature that examines the drivers of cross-border lending during and after the financial crisis (for instance, De Haas and Van Lelyveld (2011), Rose andWieladek (2011), Cetorelli andGoldberg (2012a), Giannetti and Laeven (2012), De Haas and Van Horen (2012), Buch et al (2014), Cerutti et al (2014, Cerutti et al (2015)). In this context, Cetorelli and Goldberg (2012) and Temesvary et al (2016) find that US monetary policy has a significant effect on US banks' cross-border lending abroad before the crisis.…”

Section: Related Literaturementioning

confidence: 88%

The Currency Dimension of the Bank Lending Channel in International Monetary Transmission

Takáts

Temesváry

2017

FEDS

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Abstract:We investigate how the use of a currency transmits monetary policy shocks in the global banking system. We use newly available unique data on the bilateral cross-border lending flows of 27 BIS-reporting lending banking systems to over 50 borrowing countries, broken down by currency denomination (USD, EUR and JPY). We have three main findings. First, monetary shocks in a currency significantly affect cross-border lending flows in that currency, even when neither the lending banking system nor the borrowing country uses that currency as their own. Second, this transmission works mainly through lending to non-banks. Third, this currency dimension of the bank lending channel works similarly across the three currencies suggesting that the crossborder bank lending channel of liquidity shock transmission may not be unique to lending in USD.

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Multinational Banks and the Global Financial Crisis: Weathering the Perfect Storm?

Cited by 94 publications

References 78 publications

Financial Development and Economic Growth: The Role of Foreign-Owned Banks in CESEE Countries

Financial Development and Economic Growth: The Role of Foreign-Owned Banks in CESEE Countries

Is China or India more financially open?

The Currency Dimension of the Bank Lending Channel in International Monetary Transmission

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