The two faces of cross-border banking flows: An investigation into the links between global risk, arms-length funding, and internal capital markets

Dennis Reinhardt, Steven Riddiough 07 May 2014

a

A

Following the collapse of Lehman Brothers in September 2008, global risk spiked and the world witnessed a collapse in cross-border funding between banks. On closer inspection, however, not all countries’ banking systems experienced a withdrawal of cross-border finance. In fact, a number actually enjoyed an inflow of funding from banks overseas (Figure 1).

Figure 1 Cross-border bank-to-bank flows following the collapse of Lehman Brothers

a

A

Topics:  Financial markets International finance

Tags:  financial stability, banking, Wholesale funding, interbank lending, Cross-border lending, cross-border banking

Who is to blame for the credit crunch: foreign ownership or foreign funding?

Erik Feyen, Raquel Letelier, Inessa Love, Samuel Munzele Maimbo, Roberto Rocha 15 March 2014

a

A

From boom to crunch

Although most developing countries around the world experienced a severe contraction of bank credit during the recent global financial crisis, the Eastern Europe and Central Asia (ECA) region was disproportionately hit after it had experienced very high credit growth (Figure 1).

Figure 1. Banking system trends in ECA

a

A

Topics:  Financial markets Global crisis International finance

Tags:  Credit crunch, global financial crisis, banking, Eastern Europe, cross-border banking, credit growth, Central Asia

A new eReport: Excessive risk-taking by banks

Richard Baldwin 30 March 2012

a

A

For many, the global crisis was caused by the interlinked fragilities that arose in the banking and financial sectors; these themselves were created by mindless deregulation and permissive monetary policy. By the late 2000s, the system was so precarious that shocks from many directions could have triggered the economic conflagration we witnessed.

a

A

Topics:  Global crisis Global economy Microeconomic regulation

Tags:  risk-taking, cross-border banking, macroprudential regulation

Home bias and the credit crunch: Evidence from Italy

Andrea F Presbitero, Gregory F Udell, Alberto Zazzaro 12 February 2012

a

A

The management of the Eurozone sovereign debt crisis will have significant effects on the stability of national banking systems, as argued in some recent Vox columns (Acharya et al 2011, Wyplosz 2011). The interaction between the debt crisis and banking risk will likely affect bank capital positions and might also affect bank liquidity and the fragility of the interbank markets.

a

A

Topics:  Financial markets

Tags:  Italy, Credit crunch, banks, cross-border banking

Foreign banks and the global financial crisis: Investment and lending behaviour

Stijn Claessens, Neeltje van Horen 31 January 2012

a

A

Foreign banks have in many countries become important sources of financial intermediation. Given this importance, understanding the impact of the financial crisis on foreign-bank behaviour is important. Questions being asked include:

a

A

Topics:  Global crisis International finance

Tags:  investment, global crisis, foreign banks, cross-border banking

Foreign banks: Trends and impact on financial development

Stijn Claessens, Neeltje van Horen 28 January 2012

a

A

Although interrupted by the recent financial crisis, the past two decades have seen an unprecedented degree of globalisation, especially in financial services. Cross-border bank and other capital flows have increased dramatically. Many banks have ventured abroad and established a presence in other countries. This has happened among EU countries (Allen et al 2011), but especially in emerging markets and developing countries.

a

A

Topics:  Development International finance

Tags:  development, foreign banks, cross-border banking

Coordinating bank-failure costs and financial stability

Iman van Lelyveld, Marco Spaltro 27 October 2011

a

A

During the financial crisis, failure or distress of cross-border firms has been met by ad hoc coordinated solutions (eg Fortis and Dexia) or national solutions (eg UK and US banks). However, economic theory (such as Freixas 2003) shows that ‘improvised coordination’ is inefficient as it leads to a general under-provision of the public good (ie financial stability). The European Financial Stability Facility (EFSF) for the Eurozone (EZ) constitutes the first example instead of an ex ante burden-sharing agreement.

a

A

Topics:  Europe's nations and regions Global crisis International finance

Tags:  financial stability, Eurozone crisis, cross-border banking, burden-sharing, bank resolution

The future of cross-border banking

Dirk Schoenmaker 25 October 2011

a

A

International trade and multinational business operations have traditionally been facilitated by international banks. The client-pull hypothesis (Grosse and Goldberg 1991) argues that a bank’s international clientele provide an incentive for internationalisation by that bank, since the financial system of the foreign country might lack the sophistication desired by the bank’s clientele.

a

A

Topics:  International finance

Tags:  decoupling, cross-border banking

Cross-Border Banking in Europe: Implications for Financial Stability and Macroeconomic Policies

Thorsten Beck, Wolf Wagner, Philip R. Lane, Dirk Schoenmaker, Elena Carletti, Franklin Allen,

Date Published

Mon, 06/20/2011

a

A

cepr_featured

1

Show in Editors Choice Box?

0

Display Order

0

Display Order

-10

eBook

0

Topics

EU policies Financial markets Global crisis

Partners

CEPR

URL

http://www.cepr.org/pubs/books/CEPR/booklist.asp?cvno=P223

Cross-Border Banking in Europe: Implications for Financial Stability and Macroeconomic Policies

by Franklin Allen, Thorsten Beck, Elena Carletti, Philip R. Lane, Dirk Schoenmaker and Wolf Wagner

Download PDF

Tags
Europe, micro-prudential regulation, macro-prudential regulation, cross-border banking

Events