The Great Cross Border Bank Deleveraging

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The Great Cross-Border Bank Deleveraging

Mr.Eugenio Cerutti,Mr.Stijn Claessens
The Great Cross Border Bank Deleveraging Book PDF

Author : Mr.Eugenio Cerutti,Mr.Stijn Claessens
Publisher : International Monetary Fund
Page : 38 pages
File Size : 45,6 Mb
Release : 2014-09-25
Category : Business & Economics
ISBN : 9781498332620

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The Great Cross-Border Bank Deleveraging by Mr.Eugenio Cerutti,Mr.Stijn Claessens Pdf

International banks greatly reduced their direct cross-border and local affiliates’ lending as the global financial crisis strained balance sheets, lowered borrower demand, and changed government policies. Using bilateral, lender-borrower countrydata and controlling for credit demand, we show that reductions largely varied in line with markets’ prior assessments of banks’ vulnerabilities, with banks’ financial statement variables and lender-borrower country characteristics playing minor roles. We find evidence that moving resources within banking groups became more restricted as drivers of reductions in direct cross-border loans differ from those for local affiliates’ lending, especially for impaired banking systems. Home bias induced by government interventions, however, affected both equally.

The Great Cross-Border Bank Deleveraging

Mr.Eugenio Cerutti,Mr.Stijn Claessens
The Great Cross Border Bank Deleveraging Book PDF

Author : Mr.Eugenio Cerutti,Mr.Stijn Claessens
Publisher : INTERNATIONAL MONETARY FUND
Page : 0 pages
File Size : 44,6 Mb
Release : 2014-09-25
Category : Business & Economics
ISBN : 1498354785

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The Great Cross-Border Bank Deleveraging by Mr.Eugenio Cerutti,Mr.Stijn Claessens Pdf

International banks greatly reduced their direct cross-border and local affiliates’ lending as the global financial crisis strained balance sheets, lowered borrower demand, and changed government policies. Using bilateral, lender-borrower countrydata and controlling for credit demand, we show that reductions largely varied in line with markets’ prior assessments of banks’ vulnerabilities, with banks’ financial statement variables and lender-borrower country characteristics playing minor roles. We find evidence that moving resources within banking groups became more restricted as drivers of reductions in direct cross-border loans differ from those for local affiliates’ lending, especially for impaired banking systems. Home bias induced by government interventions, however, affected both equally.

Financial Contagion Through Bank Deleveraging

Mr.Thierry Tressel
Financial Contagion Through Bank Deleveraging Book PDF

Author : Mr.Thierry Tressel
Publisher : International Monetary Fund
Page : 39 pages
File Size : 45,6 Mb
Release : 2010-10-01
Category : Business & Economics
ISBN : 9781455209361

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Financial Contagion Through Bank Deleveraging by Mr.Thierry Tressel Pdf

The financial crisis has highlighted the importance of various channels of financial contagion across countries. This paper first presents stylized facts of international banking activities during the crisis. It then describes a simple model of financial contagion based on bank balance sheet identities and behavioral assumptions of deleveraging. Cascade effects can be triggered by bank losses or contractions of interbank lending activities. As a result of shocks on assets or on liabilities of banks, a global deleveraging of international banking activities can occur. Simple simulations are presented to illustrate the use of the model and the relative importance of contagion channels, relying on bank losses of advanced countries’ banking systems during the financial crisis to calibrate the shock. The outcome of the simulations is compared with the deleveraging observed during the crisis suggesting that leverage is a major determinant of financial contagion.

The Domestic Credit Supply Response to International Bank Deleveraging

Mr.Shekhar Aiyar,Ms.Sonali Jain-Chandra
The Domestic Credit Supply Response to International Bank Deleveraging Book PDF

Author : Mr.Shekhar Aiyar,Ms.Sonali Jain-Chandra
Publisher : International Monetary Fund
Page : 15 pages
File Size : 54,9 Mb
Release : 2012-10-26
Category : Business & Economics
ISBN : 9781475562347

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The Domestic Credit Supply Response to International Bank Deleveraging by Mr.Shekhar Aiyar,Ms.Sonali Jain-Chandra Pdf

During the global financial crisis, European banks contracted foreign claims on recipient economies sharply. This paper examines the impact of that deleveraging on credit supply in recipient economies, with a particular focus on Asia. Identification is achieved by exploiting heterogeneity in ex-ante patterns of funding reliance on different European banking systems, and in variation in the ratio of local claims in local currency to total foreign claims in recipient economies. These sources of variation are used to create instruments for the deleveraging shock. We find that the contraction in European bank foreign claims was associated with a substantial reduction in domestic credit supply in a broad sample of countries. However, the credit supply response in Asia was only about half the size of the response in non-Asian countries, possibly due to a more robust policy response and healthier local bank balance sheets at the outset of the crisis.

Cross-border Banking and the Circumvention of Macroprudential and Capital Control Measures

Mr.Eugenio M Cerutti,Haonan Zhou
Cross border Banking and the Circumvention of Macroprudential and Capital Control Measures Book PDF

Author : Mr.Eugenio M Cerutti,Haonan Zhou
Publisher : International Monetary Fund
Page : 46 pages
File Size : 43,7 Mb
Release : 2018-09-28
Category : Business & Economics
ISBN : 9781484378328

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Cross-border Banking and the Circumvention of Macroprudential and Capital Control Measures by Mr.Eugenio M Cerutti,Haonan Zhou Pdf

We analyze the joint impact of macroprudential and capital control measures on cross-border banking flows, while controlling for multidimensional aspects in lender-and-borrower-relationships (e.g., distance, cultural proximity, microprudential regulations). We uncover interesting spillover effects from both types of measures when applied either by lender or borrowing countries, with many of them most likely associated with circumvention or arbitrage incentives. While lender countries’ macroprudential policies reduce direct cross-border banking outflows, they are associated with larger outflows through local affiliates. Direct cross-border inflows are higher in borrower countries with more usage of macroprudential policies, and are linked to circumvention motives. In the case of capital controls, most spillovers seem to be present through local affiliates. We do not find evidence to support the idea that additional capital inflow controls could interact with macro-prudential policies to mitigate cross-border spillovers.

Global Liquidity and Drivers of Cross-Border Bank Flows

Mr.Eugenio Cerutti,Mr.Stijn Claessens,Mr.Lev Ratnovski
Global Liquidity and Drivers of Cross Border Bank Flows Book PDF

Author : Mr.Eugenio Cerutti,Mr.Stijn Claessens,Mr.Lev Ratnovski
Publisher : International Monetary Fund
Page : 33 pages
File Size : 51,9 Mb
Release : 2014-04-29
Category : Business & Economics
ISBN : 9781475517729

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Global Liquidity and Drivers of Cross-Border Bank Flows by Mr.Eugenio Cerutti,Mr.Stijn Claessens,Mr.Lev Ratnovski Pdf

This paper provides a definition of global liquidity consistent with its meaning as the “ease of financing” in international financial markets. Using a longer time series and broader sample of countries than in previous studies, it identifies global factors driving cross-border bank flows, alongside country-specific factors. It confirms the explanatory power of US financial conditions, with flows decreasing in market volatility (VIX) and term premia, and increasing in bank leverage, growth in domestic credit and M2. A new finding is that similar variables for other systemic countries – the UK and the Euro Area – are also important, sometimes even more so, consistent with the dominant role of European banks in cross-border banking. Furthermore, recipient country characteristics are found to affect not only the level of country-specific flows, but also the cyclical impact of global liquidity, with sensitivities of flows to banks decreasing with stronger macroeconomic frameworks and better bank regulation, but less so for flows to non-financial firms.

The Handbook of Global Shadow Banking, Volume I

Luc Nijs
The Handbook of Global Shadow Banking Volume I Book PDF

Author : Luc Nijs
Publisher : Springer Nature
Page : 822 pages
File Size : 43,8 Mb
Release : 2020-06-30
Category : Business & Economics
ISBN : 9783030347437

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The Handbook of Global Shadow Banking, Volume I by Luc Nijs Pdf

This global handbook provides an up-to-date and comprehensive overview of shadow banking, or market-based finance as it has been recently coined. Engaging in financial intermediary services outside of normal regulatory parameters, the shadow banking sector was arguably a critical factor in causing the 2007-2009 financial crisis. This volume focuses specifically on shadow banking activities, risk, policy and regulatory issues. It evaluates the nexus between policy design and regulatory output around the world, paying attention to the concept of risk in all its dimensions—the legal, financial, market, economic and monetary perspectives. Particular attention is given to spillover risk, contagion risk and systemic risk and their positioning and relevance in shadow banking activities. Newly introduced and incoming policies are evaluated in detail, as well as how risk is managed, observed and assessed, and how new regulation can potentially create new sources of risk. Volume I concludes with analysis of what will and still needs to happen in the event of another crisis. Proposing innovative suggestions for improvement, including a novel Pigovian tax to tame financial and systemic risks, this handbook is a must-read for professionals and policy-makers within the banking sector, as well as those researching economics and finance.

Global Financial Stability Report, April 2015

International Monetary Fund. Monetary and Capital Markets Department
Global Financial Stability Report April 2015 Book PDF

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : INTERNATIONAL MONETARY FUND
Page : 0 pages
File Size : 49,7 Mb
Release : 2015-04-15
Category : Business & Economics
ISBN : 1498372937

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Global Financial Stability Report, April 2015 by International Monetary Fund. Monetary and Capital Markets Department Pdf

The current report finds that, despite an improvement in economic prospects in some key advanced economies, new challenges to global financial stability have arisen. The global financial system is being buffeted by a series of changes, including lower oil prices and, in some cases, diverging growth patterns and monetary policies. Expectations for rising U.S. policy rates sparked a significant appreciation of the U.S. dollar, while long term bond yields in many advanced economies have decreased—and have turned negative for almost a third of euro area sovereign bonds—on disinflation concerns and the prospect of continued monetary accommodation. Emerging markets are caught in these global cross currents, with some oil exporters and other facing new stability challenges, while others have gained more policy space as a result of lower fuel prices and reduced inflationary pressures. The report also examines changes in international banking since the global financial crisis and finds that these changes are likely to promote more stable bank lending in host countries. Finally, the report finds that the asset management industry needs to strengthen its oversight framework to address financial stability risks from incentive problems between end-investors and portfolio managers and the risk of runs due to liquidity mismatches.

The Impact of the Global Financial Crisis on Banking Globalization

Mr.Stijn Claessens,Neeltje van Horen
The Impact of the Global Financial Crisis on Banking Globalization Book PDF

Author : Mr.Stijn Claessens,Neeltje van Horen
Publisher : International Monetary Fund
Page : 50 pages
File Size : 50,7 Mb
Release : 2014-10-27
Category : Business & Economics
ISBN : 9781498301435

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The Impact of the Global Financial Crisis on Banking Globalization by Mr.Stijn Claessens,Neeltje van Horen Pdf

Although cross-border bank lending has fallen sharply since the crisis, extending our bank ownership database from 1995-2009 up to 2013 shows only limited retrenchment in foreign bank presence. While banks from OECD countries reduced their foreign presence (but still represent 89% of foreign bank assets), those from emerging markets and developing countries expanded abroad and doubled their presence. Especially advanced countries hit by a systemic crisis reduced their presence abroad, with far flung and relatively small investments more likely to be sold. Poorer and slower growing countries host fewer banks today, while large investments less likely expanded. Conversely, faster host countries’ growth and closeness to potential investors meant more entry. Lending by foreign banks locally grew more than cross-border bank claims did for the same home-host country combination, and each was driven by different factors. Altogether, our evidence shows that global banking is not becoming more fragmented, but rather is going through some important structural transformations with a greater variety of players and a more regional focus.

Financial Crises and the Composition of Cross-Border Lending

Mr.Eugenio Cerutti,Galina Hale,Ms.Camelia Minoiu
Financial Crises and the Composition of Cross Border Lending Book PDF

Author : Mr.Eugenio Cerutti,Galina Hale,Ms.Camelia Minoiu
Publisher : International Monetary Fund
Page : 59 pages
File Size : 49,8 Mb
Release : 2014-10-16
Category : Business & Economics
ISBN : 9781498346825

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Financial Crises and the Composition of Cross-Border Lending by Mr.Eugenio Cerutti,Galina Hale,Ms.Camelia Minoiu Pdf

We examine the composition and drivers of cross-border bank lending between 1995 and 2012, distinguishing between syndicated and non-syndicated loans. We show that on-balance sheet syndicated loan exposures account for almost one third of total cross-border loan exposures during this period. Furthermore, syndicated loan exposures increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis. Our empirical analysis of the drivers of cross-border loan exposures in a large bilateral dataset shows three main results. First, banks with lower levels of capital favor syndicated over other kinds of cross-border loans. Second, borrower country characteristics such as level of development, economic size, and capital account openness, are less important in driving syndicated than non-syndicated loan activity, suggesting a diversification motive for syndication. Third, information asymmetries between lender and borrower countries, which are important both in normal and crisis times, became more binding for both types of cross-border lending activity during the recent crisis.

Internationalization of Banks

Federica Sist
Internationalization of Banks Book PDF

Author : Federica Sist
Publisher : Springer
Page : 98 pages
File Size : 40,7 Mb
Release : 2018-04-10
Category : Business & Economics
ISBN : 9783319782775

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Internationalization of Banks by Federica Sist Pdf

This book reviews banking internationalization by considering the new paradigms of globalization. The author primarily analyses why and how banks internationalize through equity deals, and the effect of regulation and market integration on the formation of deals, which allows authorities to manage the banking structure. This is a unique work that describes the relevance of the ownership model and cultural features of the partners and the key factors that help in choosing the market in which the banks bring activities abroad. The book addresses market characteristics, and new scenarios that should impact banks’ internationalization strategies and ability to achieve success in deals that capture the attention of both researchers and practitioners.

Changes in Prudential Policy Instruments — A New Cross-Country Database

Mr.Eugenio M Cerutti,Mr.Ricardo Correa,Elisabetta Fiorentino,Esther Segalla
Changes in Prudential Policy Instruments A New Cross Country Database Book PDF

Author : Mr.Eugenio M Cerutti,Mr.Ricardo Correa,Elisabetta Fiorentino,Esther Segalla
Publisher : International Monetary Fund
Page : 23 pages
File Size : 41,7 Mb
Release : 2016-09-08
Category : Business & Economics
ISBN : 9781475535457

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Changes in Prudential Policy Instruments — A New Cross-Country Database by Mr.Eugenio M Cerutti,Mr.Ricardo Correa,Elisabetta Fiorentino,Esther Segalla Pdf

This paper documents the features of a new database that focuses on changes in the intensity in the usage of several widely used prudential tools, taking into account both macro-prudential and micro-prudential objectives. The database coverage is broad, spanning 64 countries, and with quarterly data for the period 2000Q1 through 2014Q4. The five types of prudential instruments in the database are: capital buffers, interbank exposure limits, concentration limits, loan to value (LTV) ratio limits, and reserve requirements. A total of nine prudential tools are constructed since some useful further decompositions are presented, with capital buffers divided into four subindices: general capital requirements, real state credit specific capital buffers, consumer credit specific capital buffers, and other specific capital buffers; and with reserve requirements divided into two sub-indices: domestic currency capital requirements and foreign currency capital requirements. While general capital requirements have the most changes from the cross-country perspective, LTV ratio limits and reserve requirements have the largest number of tightening and loosening episodes. We also analyze the instruments’ usage in relation to the evolution of key variables such as credit, policy rates, and house prices, finding substantial differences in the patterns of loosening or tightening of instruments in relation to business and financial cycles.

Global Financial Flows in the Pre- and Post-global Crisis Periods

Yoichi Matsubayashi,Shigeto Kitano
Global Financial Flows in the Pre and Post global Crisis Periods Book PDF

Author : Yoichi Matsubayashi,Shigeto Kitano
Publisher : Springer Nature
Page : 240 pages
File Size : 44,7 Mb
Release : 2022-09-03
Category : Business & Economics
ISBN : 9789811936135

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Global Financial Flows in the Pre- and Post-global Crisis Periods by Yoichi Matsubayashi,Shigeto Kitano Pdf

This book covers many aspects of excessive expansion of cross-border capital flows underlying the global financial crises that occurred in succession in the form of the subprime mortgage crisis, the collapse of Lehman Brothers, and the European debt crisis. Obtaining a broader picture of financial flows at the global level from various perspectives is essential to comprehensively understand the fundamental causes for a series of global-scale financial crises and to formulate effective policy responses in the future. The topics addressed here include a basic concept and overview of global liquidity in a broad sense, domestic and international credit activities of financial institutions in both advanced and emerging countries, and global demand for US dollars. Offshore bond issuance in BRICs countries, including its implications for the Chinese shadow banking sector, uncovered interest rate parity puzzle, and related policies such as capital controls are covered as well. This book is highly recommended to readers who seek an in-depth and up-to-date integrated overview of the dynamics of today’s globalized financial markets.

A Modern Guide to Financial Shocks and Crises

Ferri, Giovanni,D’Apice, Vincenzo
A Modern Guide to Financial Shocks and Crises Book PDF

Author : Ferri, Giovanni,D’Apice, Vincenzo
Publisher : Edward Elgar Publishing
Page : 384 pages
File Size : 55,5 Mb
Release : 2021-12-14
Category : Business & Economics
ISBN : 9781789904529

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A Modern Guide to Financial Shocks and Crises by Ferri, Giovanni,D’Apice, Vincenzo Pdf

Offering a comprehensive guide to financial shocks and crises, this book explores their increasing occurrence in current market economies, as well as their power to wrench the macroeconomy. The book discusses three critical questions: what causes financial shocks; which channels may exacerbate their impact; and what policies could help avoid them or limit their negative effect on the economy and society at large.

Portfolio Inflows Eclipsing Banking Inflows: Alternative Facts?

Mr.Eugenio M Cerutti,Mr.Gee Hee Hong
Portfolio Inflows Eclipsing Banking Inflows Alternative Facts Book PDF

Author : Mr.Eugenio M Cerutti,Mr.Gee Hee Hong
Publisher : International Monetary Fund
Page : 36 pages
File Size : 50,9 Mb
Release : 2018-02-16
Category : Business & Economics
ISBN : 9781484342688

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Portfolio Inflows Eclipsing Banking Inflows: Alternative Facts? by Mr.Eugenio M Cerutti,Mr.Gee Hee Hong Pdf

Superficial examination of aggregate gross cross-border capital inflow data suggests that there was no substitution between portfolio inflows and bank loans in recent years. However, our novel analysis of disaggregate inflows (both by types of instrument and borrower) shows interesting heterogeneity. There has been substitution of bank loans for portfolio debt securities not only in the case of corporate and sovereign borrowers in advanced countries, but also sovereign borrowers in emerging countries. In the case of corporate borrowers in emerging markets, the relationship corresponds to complementarity across types of gross capital inflows, especially during periods of positive capital gross inflows after the global financial crisis. A large part of these patterns does not seem to be driven by a common phenomenon across countries associated with the global financial cycle, but rather by country-specific factors.