The International Transmission of Bank Liquidity Shocks
Title | The International Transmission of Bank Liquidity Shocks PDF eBook |
Author | Philipp Schnabl |
Publisher | |
Pages | 46 |
Release | 2011 |
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ISBN |
I exploit the 1998 Russian default as a negative liquidity shock to international banks and analyze its transmission to Peru. I find that after the shock international banks reduce bank-to-bank lending to Peruvian banks and Peruvian banks reduce lending to Peruvian firms. The effect is strongest for domestically owned banks that borrow internationally, intermediate for foreign-owned banks, and weakest for locally funded banks. I control for credit demand by examining firms that borrow from several banks. These results suggest that international banks transmit liquidity shocks across countries and that negative liquidity shocks reduce bank lending in affected countries.
The Transmission of Liquidity Shocks
Title | The Transmission of Liquidity Shocks PDF eBook |
Author | Mr.Philippe D Karam |
Publisher | International Monetary Fund |
Pages | 38 |
Release | 2014-11-19 |
Genre | Business & Economics |
ISBN | 1498348394 |
We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core deposits and wholesale funding, especially during the global financial crisis. This translates into a reduction in lending to households and non-financial corporates at home and abroad. The effect on domestic lending, however, is mitigated when banks (i) hold a larger buffer of liquid assets, (ii) diversify away from rating-sensitive sources of funding, and (iii) activate internal liquidity support measures. Foreign lending is significantly reduced during a crisis at home only for subsidiaries with weak funding self-sufficiency.
The Transmission of Bank Liquidity Shocks
Title | The Transmission of Bank Liquidity Shocks PDF eBook |
Author | H. Özlem Dursun-de Neef |
Publisher | |
Pages | 51 |
Release | 2018 |
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This paper uses the 2007-2009 financial crisis as a negative liquidity shock on banks in the US and analyzes its transmission to the real economy. The ex-ante heterogeneity in the amount of long-term debt that matured during the crisis is used to measure the variation in banks' exposure to the liquidity shock. I find that banks transmitted the liquidity shock to the real economy by reducing their loan supply. The reduction was particularly strong for real estate loans. As a result, house prices declined in the MSAs where these banks have branches. Bank capital plays a significant role in the transmission: Under-capitalized banks transmitted the liquidity shock, whereas well-capitalized banks' lending did not show any decline.
Global Banks and International Shock Transmission
Title | Global Banks and International Shock Transmission PDF eBook |
Author | Nicola Cetorelli |
Publisher | DIANE Publishing |
Pages | 41 |
Release | 2010-11 |
Genre | Business & Economics |
ISBN | 1437933874 |
Global banks played a significant role in transmitting the 2007-09 financial crisis to emerging-market (EM) economies. The authors examine adverse liquidity shocks on main developed-country banking systems and their relationships to EM across Europe, Asia, and Latin Amer., isolating loan supply from loan demand effects. Loan supply in EM across Europe, Asia, and Latin Amer. was affected significantly through three separate channels: (1) a contraction in direct, cross-border lending by foreign banks; (2) a contraction in local lending by foreign banks¿ affiliates in EM; and (3) a contraction in loan supply by domestic banks, resulting from the funding shock to their balance sheets induced by the decline in interbank, cross-border lending. Charts and tables.
Transmission of Bank Liquidity Shocks in Loan and Deposit Markets
Title | Transmission of Bank Liquidity Shocks in Loan and Deposit Markets PDF eBook |
Author | |
Publisher | |
Pages | 29 |
Release | 2010 |
Genre | |
ISBN |
Asymmetric Transmission of a Bank Liquidity Shock
Title | Asymmetric Transmission of a Bank Liquidity Shock PDF eBook |
Author | Rafael Felipe Schiozer |
Publisher | |
Pages | 44 |
Release | 2014 |
Genre | |
ISBN |
International Transmission of Liquidity Shocks Between Parent Banks and Their Affiliates
Title | International Transmission of Liquidity Shocks Between Parent Banks and Their Affiliates PDF eBook |
Author | Małgorzata Pawłowska |
Publisher | |
Pages | 0 |
Release | 2014 |
Genre | |
ISBN |