Advanced Search
MyIDEAS: Login to save this paper or follow this series

The mix of international banks'foreign claims: determinants and implications

Contents:

Author Info

  • Alicia García-Herrero

    ()
    (Banco de España)

  • María Soledad Martínez-Pería

    ()
    (World Bank)

Abstract

This paper analyzes the determinants and implications for financial stability of the mix of international banks' claims countries receive. In particular, we distinguish between local claims, extended by international banks through their affiliates in a host (or claim recipient) country, and cross border claims, booked from outside the host country, typically from banks' headquarters in their home countries. Using data on US, Spanish, and Italian banks' foreign claims across countries, we find that the share of local foreign claims is primarily driven by the degree of "freedom" in the host banking sector and by business opportunities in the local market. Entry requirements, startup and informational costs associated with international banking also play a role, but their influence is less robust. Finally, we find that the mix of international bank claims has implications for financial stability, since foreign claim volatility is lower in countries that receive a larger share of local claims.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/05/Fic/dt0525e.pdf
File Function: First version, August 2005
Download Restriction: no

Bibliographic Info

Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0525.

as in new window
Length: 35 pages
Date of creation: Aug 2005
Date of revision:
Handle: RePEc:bde:wpaper:0525

Contact details of provider:
Email:
Web page: http://www.bde.es/
More information through EDIRC

Related research

Keywords: foreign bank financing; financial fdi; cross-border claims;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Allen N. Berger & Leora F. Klapper & Gegory F. Udell, 2001. "The ability of banks to lend to informationally opaque small businesses," Proceedings, Federal Reserve Bank of Chicago 709, Federal Reserve Bank of Chicago.
  2. B. Gerard Dages & Linda Goldberg & Daniel Kinney, 2000. "Foreign and domestic bank participation in emerging markets: lessons from Mexico and Argentina," Economic Policy Review, Federal Reserve Bank of New York, Federal Reserve Bank of New York, issue Sep, pages 17-36.
  3. Brainard, S Lael, 1997. "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade," American Economic Review, American Economic Association, American Economic Association, vol. 87(4), pages 520-44, September.
  4. Mitchell A. Petersen & Raghuram G. Rajan, 2000. "Does Distance Still Matter? The Information Revolution in Small Business Lending," NBER Working Papers 7685, National Bureau of Economic Research, Inc.
  5. R. T.A. de Haas & I. P.P van Lelyveld, 2004. "Foreign Bank Penetration and Private Sector Credit in Central and Eastern Europe," Journal of Emerging Market Finance, Institute for Financial Management and Research, Institute for Financial Management and Research, vol. 3(2), pages 125-151, August.
  6. Glick, Reuven & Rose, Andrew K, 2001. "Does a Currency Union Affect Trade? The Time Series Evidence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2891, C.E.P.R. Discussion Papers.
  7. Focarelli, Dario & Pozzolo, Alberto Franco, 2003. "Where Do Banks Expand Abroad? An Empirical Analysis," Economics & Statistics Discussion Papers esdp03009, University of Molise, Dept. EGSeI.
  8. Atif Mian, 2006. "Distance Constraints: The Limits of Foreign Lending in Poor Economies," Journal of Finance, American Finance Association, American Finance Association, vol. 61(3), pages 1465-1505, 06.
  9. Buch, Claudia M. & DeLong, Gayle, 2004. "Cross-border bank mergers: What lures the rare animal?," Journal of Banking & Finance, Elsevier, Elsevier, vol. 28(9), pages 2077-2102, September.
  10. Martinez Peria, Maria Soledad & Mody, Ashoka, 2004. "How foreign participation and market concentration impact bank spreads : evidence from Latin America," Policy Research Working Paper Series 3210, The World Bank.
  11. David E. Palmer, 2000. "U.S. bank exposure to emerging-market countries during recent financial crises," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), Board of Governors of the Federal Reserve System (U.S.), issue Feb, pages 81-96.
  12. Joe Peek & Eric S. Rosengren, 2000. "Implications of the globalization of the banking sector: the Latin American experience," New England Economic Review, Federal Reserve Bank of Boston, Federal Reserve Bank of Boston, issue Sep, pages 45-62.
  13. Clarke, George & Cull, Robert & Martinez Peria, Maria Soledad & Sanchez, Susana M., 2001. "Foreign bank entry - experience, implications for developing countries, and agenda for further research," Policy Research Working Paper Series 2698, The World Bank.
  14. Clarke, George R. G. & Cull, Robert & Martinez Peria, Maria Soledad & Sanchez, Susana M., 2002. "Bank lending to small businesses in Latin America : does Bank origin matter?," Policy Research Working Paper Series 2760, The World Bank.
  15. Moshirian, Fariborz, 2001. "International investment in financial services," Journal of Banking & Finance, Elsevier, Elsevier, vol. 25(2), pages 317-337, February.
  16. Barth, James R. & Caprio Jr, Gerard & Levine, Ross, 2001. "The regulation and supervision of banks around the world - a new database," Policy Research Working Paper Series 2588, The World Bank.
  17. Serge Jeanneau & Marian Micu, 2002. "Determinants of international bank lending to emerging market countries," BIS Working Papers 112, Bank for International Settlements.
  18. Focarelli, Dario & Pozzolo, Alberto Franco, 2001. "The patterns of cross-border bank mergers and shareholdings in OECD countries," Journal of Banking & Finance, Elsevier, Elsevier, vol. 25(12), pages 2305-2337, December.
  19. Goldberg, Lawrence G. & Grosse, Robert, 1994. "Location choice of foreign banks in the United States," Journal of Economics and Business, Elsevier, Elsevier, vol. 46(5), pages 367-379, December.
  20. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2003. "Export versus FDI," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1998, Harvard - Institute of Economic Research.
  21. Berger, Allen N. & Miller, Nathan H. & Petersen, Mitchell A. & Rajan, Raghuram G. & Stein, Jeremy C., 2005. "Does function follow organizational form? Evidence from the lending practices of large and small banks," Journal of Financial Economics, Elsevier, Elsevier, vol. 76(2), pages 237-269, May.
  22. Ball, Clifford A. & Tschoegl, Adrian E., 1982. "The Decision to Establish a Foreign Bank Branch or Subsidiary: An Application of Binary Classification Procedures," Journal of Financial and Quantitative Analysis, Cambridge University Press, Cambridge University Press, vol. 17(03), pages 411-424, September.
  23. Enrica Detragiache & Poonam Gupta, 2004. "Foreign Banks in Emerging Market Crises," IMF Working Papers 04/129, International Monetary Fund.
  24. Asli Demirgüç-Kunt & Luc Laeven & Ross Levine, 2004. "Regulations, market structure, institutions, and the cost of financial intermediation," Proceedings, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, pages 593-626.
  25. Barajas, Adolfo & Steiner, Roberto & Salazar, Natalia, 2000. "The impact of liberalization and foreign investment in Colombia's financial sector," Journal of Development Economics, Elsevier, Elsevier, vol. 63(1), pages 157-196, October.
  26. Mauro F. Guillén & Adrian E. Tschoegl, 1999. "At Last the Internationalization of Retail Banking? The Case of the Spanish Banks in Latin America," Center for Financial Institutions Working Papers, Wharton School Center for Financial Institutions, University of Pennsylvania 99-41, Wharton School Center for Financial Institutions, University of Pennsylvania.
  27. Arturo Galindo & Alejandro Micco & César Manuel Serra, 2003. "Better the Devil that You Know: Evidence on Entry Costs Faced by Foreign Banks," Research Department Publications, Inter-American Development Bank, Research Department 4313, Inter-American Development Bank, Research Department.
  28. Goldberg, Lawrence G & Saunders, Anthony, 1980. "The Causes of U.S. Bank Expansion Overseas: The Case of Great Britain," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 12(4), pages 630-43, November.
  29. Wezel, Torsten, 2004. "Foreign Bank Entry into Emerging Economies: An Empirical Assessment of the Determinants and Risks Predicated on German FDI Data," Discussion Paper Series 1: Economic Studies 2004,01, Deutsche Bundesbank, Research Centre.
  30. Buch, Claudia M, 2003. " Information or Regulation: What Drives the International Activities of Commercial Banks?," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 35(6), pages 851-69, December.
  31. Bonaccorsi di Patti, Emilia & Gobbi, Giorgio, 2001. "The changing structure of local credit markets: Are small businesses special?," Journal of Banking & Finance, Elsevier, Elsevier, vol. 25(12), pages 2209-2237, December.
  32. Goldberg, Lawrence G. & Johnson, Denise, 1990. "The determinants of US banking activity abroad," Journal of International Money and Finance, Elsevier, Elsevier, vol. 9(2), pages 123-137, June.
  33. Claudia M. Buch, 1999. "Why Do Banks Go Abroad? � Evidence from German Data," Kiel Working Papers 948, Kiel Institute for the World Economy.
  34. Buch, Claudia M. & Lipponer, Alexander, 2004. "FDI versus cross-border financial services: The globalisation of German banks," Discussion Paper Series 1: Economic Studies 2004,05, Deutsche Bundesbank, Research Centre.
  35. Goldberg, Lawrence G. & Saunders, Anthony, 1981. "The determinants of foreign banking activity in the United States," Journal of Banking & Finance, Elsevier, Elsevier, vol. 5(1), pages 17-32, March.
  36. Brealey, R. A. & Kaplanis, E. C., 1996. "The determination of foreign banking location," Journal of International Money and Finance, Elsevier, Elsevier, vol. 15(4), pages 577-597, August.
  37. Petersen, Mitchell A & Rajan, Raghuram G, 1994. " The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, American Finance Association, vol. 49(1), pages 3-37, March.
  38. de Haas, Ralph & van Lelyveld, Iman, 2006. "Foreign banks and credit stability in Central and Eastern Europe. A panel data analysis," Journal of Banking & Finance, Elsevier, Elsevier, vol. 30(7), pages 1927-1952, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Luis J. Álvarez & Emmanuel Dhyne & Marco M. Hoeberichts & Claudia Kwapil & Hervé le Bihan & Patrick Lünnemann & Fernando Martins & Roberto Sabbatini & Harald Stahl & Philip Vermeulen & Jouko Vilmun, 2005. "Sticky prices in the euro area: a summary of new micro evidence," Banco de Espa�a Working Papers, Banco de Espa�a 0542, Banco de Espa�a.
  2. Claessens, Stijn, 2006. "Competitive implications of cross-border banking," Policy Research Working Paper Series 3854, The World Bank.
  3. Georgios Fotopoulos & Helen Louri, 2011. "On the geography of international banking: the role of third-country effects," Working Papers, Bank of Greece 125, Bank of Greece.
  4. Beck, T.H.L., 2006. "Creating an efficient financial system: Challenges in a global economy," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3508413, Tilburg University.
  5. Siregar, Reza Yamora & Choy, KM, 2009. "Determinants of International Bank Lending from the Developed World to East Asia," MPRA Paper 14989, University Library of Munich, Germany.
  6. Sophie Brana & Delphine Lahet, 2011. "Foreign Banks and the Stability of Foreign and Domestic Credit in CEECs," Larefi Working Papers, Larefi, Université Bordeaux 4 1107, Larefi, Université Bordeaux 4.
  7. Lehner, Maria, 2008. "Entry Mode Choice of Multinational Banks," Discussion Papers in Economics, University of Munich, Department of Economics 8222, University of Munich, Department of Economics.
  8. Rong Ma & Susan Pozo, 2012. "International Labor Migration And Foreign Bank Penetration In Developing Economies," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1240004-1-1.
  9. Patrick McGuire & Nikola Tarashev, 2008. "Bank health and lending to emerging markets," BIS Quarterly Review, Bank for International Settlements, Bank for International Settlements, December.
  10. Müller, Oliver & Uhde, André, 2013. "Cross-border bank lending: Empirical evidence on new determinants from OECD banking markets," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 23(C), pages 136-162.
  11. Mejra Festić, 2011. "The role of the foreign banks in the 5 EU member states," Journal of Business Economics and Management, Taylor & Francis Journals, Taylor & Francis Journals, vol. 13(1), pages 189-206, June.
  12. Suk‐Joong Kim & Eliza Wu, 2011. "International Bank Flows To Emerging Markets: Influence Of Sovereign Credit Ratings And Their Regional Spillover Effects," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, Southern Finance Association;Southwestern Finance Association, vol. 34(2), pages 331-364, 06.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bde:wpaper:0525. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mar�a Beiro. Electronic Dissemination of Information Unit. Research Department. Banco de Espa�a).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.