Cross-border bank lending to selected SEACEN economies: an integrative report

Pontines, Victor and Siregar, Reza Yamora (2011): Cross-border bank lending to selected SEACEN economies: an integrative report.

Abstract

This study seeks to address a number of rising policy concerns from the aftermath of the recent subprime crisis. Did foreign bank lending decline sharply and transmit the financial shocks from the advanced economies to the SEACEN emerging markets? Was the decline driven by the drying-up in supply of cross-border loans or more by the sharp decline in the demand for this funding? Does greater exposure of foreign banks to a host country lowered the sensitivity of its claims to shocks originating from their own economies? Do bank claims to a country affected by the aggregate changes in claims to another country? How about the stability of these flows? In short, this study aims to ascertain the various multi-faceted aspects of this international bank lending.

• Item Type: MPRA Paper
• Language: English
• Keywords: International Bank Claims; Cross-border Lending; Bank Exposure; Subprime crisis; East and Southeast Economies.
• Subjects: F - International Economics > F3 - International Finance > F34 - International Lending and Debt Problems; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; N - Economic History > N2 - Financial Markets and Institutions > N25 - Asia including Middle East; F - International Economics > F3 - International Finance > F36 - Financial Aspects of Economic Integration

References

Andersen, H., Berge, T.O., Bernhardsen, E., Lindquist, K.G. and Vatne, B.H., (2008), “A Suiteof-Models Approach to Stress-Testing Financial Stability”, Norges Bank, Staff Memo, No. 2008/2, 3 June.

BIS, (2009), Basel Committee on Banking Supervision, Consultative Document, Report and Recommendations of the Cross-border Bank Resolution Group Issued for Comment by 31 December 2009, September.

Cetorelli, N. and Goldberg, L. (2008). “Globalized Banks: Lending to Emerging Markets in the Crisis. Federal Reserve Bank of New York Staff Reports.

Cetorelli, N. and Goldberg, L. (2009). “Global Banks and International Shock Transmission: Evidence from the Crisis. mimeo.

Committee of European Bank Supervisors (CEBS), (2009), Colleges of Supervisors – 10 Common Principles, January, http://www.c-ebs.org/getdoc/aeecaf1a-81b5-476a-95dd- 599c5e967697/Clean-V3-formatted-CEBS-2008-124-CEIOPS-SEC-08-54-.aspx-2008-124-CEIOPS-SEC-08-54-.aspx.

Committee on the Global Financial System-Bank for International Settlements. (2010). The functioning and resilience of cross-border funding markets. CGFS Papers No. 37.

Doluca, H., Kluh, U., Wagner, M. and Weder, B. (2010). Three birds with one stone: The G20 and systemic externalities. VOX (http://www.voxeu.org).

Eisenbeis, R.A. and Kaufman, G.G., (2008), “Cross-border Banking and Financial Stability in the EU”, Journal of Financial Stability, Vol.4.

Ferguson Jr., R.W., (2003), “Should Financial Stability be an Explicit Central Bank Objective?”,in, Monetary Stability, Financial Stability and the Business Cycle: Five Views, BIS Papers, No.18, September, http://www.bis.org/publ/bppdf/bispap18.pdf?noframes=1

Foot, M., (2003), “What is Financial Stability and How do we Get there?” The Roy Bridge Memorial Lecture , ACI, UK, April.,http://www.fsa.gov.uk/Pages/Library/Communication/Speeches/2003/sp122.shtml

Goldberg, L. (2009). “Understanding Banking Sector Globalization”. IMF Staff Papers, vol. 56, no. 1, pp. 171-197.

Herrmann, S and Mihaljeck, D (2010), “The Determinants of Cross-border Bank Flows to Emerging Markets –New Empirical Evidence on the Spread of Financial Crisis,” Discussion Paper Series 1: Economic Studies No 17/2010, Deutsche Bundesbank.

Kodres, L. and Narain, A., (2009), “What is to be Done”, Finance and Development, IMF, No. 1,Vol.46, March.

Mihaljek, D. (2008). The financial stability implications of increased capital flows for emerging market economies. BIS Papers No. 44.

Milhajek, D. (2010), “Domestic Bank Intermediation in Emerging Market Economies during the Crisis: Locally Owned versus Foreign-Owned Banks”, BIS Papers no. 54.

Mishkin, F. (2009), “Why We Shouldn’t Turn Our Backs on Financial Globalization,” International Monetary Fund Staff Papers, 56, 1, pp. 139-170.

Nijathaworn, B., (2010), “Regional Financial Supervision – Challenges and the Way Forward for Asia, Remarks at the Conference on Macroeconomic and Financial Stability in Asian Emerging Markets, Organised by the Bank Negara Malaysia and Asian Development Bank Institute, Kuala Lumpur, 4 August.

Peria, M.S.M., Powel, A. and Vladkova-Hollar, I. (2005), “Banking on Foreigners: The Behavior of International Bank Claims on Latin America, 1985-2000”, IMF Staff Papers, Vol. 52, No.3, pp.430-461.

Siregar, R and Choy, K.M. (2010), “Determinants of International Bank Lending from the Developed World to East Asia,” IMF Staff Paper, Vol. 57, No. 2, pp. 484-516.

Siregar, R.Y. and Lim, C.S., Vincent, (2010), “The Role of Central Banks in Sustaining Economic Recovery and in Achieving Financial Stability” Journal of Advanced Studies in Finance, Vol.1, Summer.

Takats, E (2010), “Cross-border Bank Lending to Emerging Market Economies”, BIS Papers no. 54.

Van Rijckeghem, C. and Weder, B. (2003), “Spillovers Through Banking Centers: A Panel Data Analysis of Bank Flows,” Journal of International Money and Finance, Vol. 22, No. 4, pp. 483-509.