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Foreign bank lending during COVID-19

Author

Listed:
  • Akgündüz, Yusuf Emre
  • Cılasun, Seyit Mümin
  • Dursun-de Neef, H. Özlem
  • Hacıhasanoğlu, Yavuz Selim
  • Yarba, Ibrahim

Abstract

We study whether foreign banks’ exposure to the pandemic in their home countries affected their lending in Türkiye. Although foreign banks issued more loans than domestic banks, the ones with higher exposure to the pandemic decreased their lending significantly: 1 percentage point higher number of deaths per thousand people in their home countries led to an almost 0.5 percent reduction in lending. This reduction was alleviated by the fiscal support provided in their home countries. Our results support an international spillover of the pandemic shock and the implemented fiscal policies via banks.

Suggested Citation

  • Akgündüz, Yusuf Emre & Cılasun, Seyit Mümin & Dursun-de Neef, H. Özlem & Hacıhasanoğlu, Yavuz Selim & Yarba, Ibrahim, 2025. "Foreign bank lending during COVID-19," Journal of Banking & Finance, Elsevier, vol. 178(C).
    • Handle: RePEc:eee:jbfina:v:178:y:2025:i:c:s0378426625001086
    DOI: 10.1016/j.jbankfin.2025.107488
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    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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