The exchange rate regime and the currency composition of corporate debt: the Mexican experience

Martı́nez, Lorenza; Werner, Alejandro

doi:10.1016/s0304-3878(02)00091-3

Cited by 87 publications

(55 citation statements)

References 9 publications

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“…A broad set of studies confirm that the use of FX debt is related to borrower characteristics, in particular borrower income structure. Large firms have been shown to match loan currencies to those of their sales in the US (Kedia and Mozumdar, 2003), Europe (Keloharju and Niskanen, 2001), Latin America (Martinez and Werner, 2002;Gelos, 2003;and Benavente et al, 2003) and East Asia (Allayannis et al, 2003).…”

Section: Bank Ownership and Client Structurementioning

confidence: 99%

Foreign banks and foreign currency lending in emerging Europe

Brown

Haas

2012

Economic Policy

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SUMMARYBased on survey data from 193 banks in 20 countries we provide the first bank-level analysis of the relationship between bank ownership, bank funding and foreign currency (FX) lending across emerging Europe. Our results contradict the widespread view that foreign banks have been driving FX lending to retail clients as a result of easier access to foreign wholesale funding. Our cross-sectional analysis shows that foreign banks do lend more in FX to corporate clients but not to households. Moreover, we find no evidence that wholesale funding had a strong causal effect on FX lending for either foreign or domestic banks. Panel estimations show that the foreign acquisition of a domestic bank does lead to faster growth in FX lending to households. However, this is driven by faster growth in household lending in general not by a shift towards FX lending.-Martin Brown and Ralph De Haas

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Section: Bank Ownership and Client Structurementioning

confidence: 99%

Foreign banks and foreign currency lending in emerging Europe

Brown

Haas

2012

Economic Policy

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“…Large firms have been shown to match loan currencies to those of their sales in the US (Kedia and Mozumdar, 2003), Europe (Keloharju and Niskanen, 2001), Latin America (Martinez and Werner [2002], Gelos [2003], and Benavente et al [2003]) and East Asia (Allayannis et al, 2003). More recent evidence suggests that the use of a foreign rather than a local currency loan by retail clients is also strongly related to borrower characteristics.…”

Section: Theorymentioning

confidence: 99%

Foreign Currency Lending in Emerging Europe: Bank Level Evidence

Brown

Haas

2010

SSRN Journal

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SummaryBased on survey data from 193 banks in 20 countries we provide the first bank-level analysis of the determinants of foreign currency (FX) lending in emerging Europe. We find that FX lending by all banks, regardless of their ownership structure, is strongly determined by the macroeconomic environment. We find no evidence of foreign banks 'pushing' FX loans indiscriminately because of easier access to wholesale funding in foreign currency. In fact, while foreign banks do lend more in FX to corporate clients, they do not do so to retail clients. We also find that after a take-over by a foreign bank, the acquired bank does not increase its FX lending any faster than a bank which remains in domestic hands.

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“…49 The share of bank credit allocated to the N-sector reached 63 percent in 1994. Martínez and Werner (2002b) and Tornell and Westermann (2003) document the existence of currency mismatch. 50 See, for instance, Lustig (2001) and Sachs, Tornell, and Velasco (1996b).…”

Section: What Accounts For Mexico's Credit Crunch?mentioning

confidence: 99%