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Financial crises and cross-border banking: New evidence

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  • Kleimeier, Stefanie
  • Sander, Harald
  • Heuchemer, Sylvia

Abstract

The surge in cross-border banking prior to global financial crises took place not only in the interbank market but also in the retail market, e.g. between banks and their private customers abroad. We utilize confidential data to estimate for the first time the effects of banking, currency and twin crises on the geography of cross-border deposits and loans. We show that each crisis type has its own specific effects, that these effects themselves lead to sustained increases in cross-border banking, and that they are different for cross-border loans and deposits, respectively.

Suggested Citation

  • Kleimeier, Stefanie & Sander, Harald & Heuchemer, Sylvia, 2013. "Financial crises and cross-border banking: New evidence," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 884-915.
    • Handle: RePEc:eee:jimfin:v:32:y:2013:i:c:p:884-915
    DOI: 10.1016/j.jimonfin.2012.07.007
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    More about this item

    Keywords

    Cross-border banking; Systemic banking crisis; Currency crisis; Gravity model; Currency union; Banking geography;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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