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Determinants of International Bank Lending from the Developed World to East Asia

Author

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  • Reza Y Siregar
  • Keen Meng Choy

Abstract

The reversal of capital flows from the banking sector, rather than portfolio equity investment, has long been considered a main reason for the severity of the East Asian financial crisis of the late 1990s. This study analyzes the factors behind the boom and bust of bank lending, focusing on loans from private banks in seven Organization for Economic Cooperation and Development countries to nine East Asian economies during the 1990–2004 period. The findings suggest that political instability and weaknesses in legal, judicial, and bureaucratic systems help explain the continued stagnation in lending after the financial crisis. Thus, institutional reforms are critical for East Asia to successfully compete for international bank financing.

Suggested Citation

  • Reza Y Siregar & Keen Meng Choy, 2010. "Determinants of International Bank Lending from the Developed World to East Asia," IMF Staff Papers, Palgrave Macmillan, vol. 57(2), pages 484-516, June.
    • Handle: RePEc:pal:imfstp:v:57:y:2010:i:2:p:484-516
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    Cited by:

    1. Siregar, Reza & Miyaki, Keita, 2013. "Regional Financial Arrangement: An Impetus for Regional Policy Cooperation," MPRA Paper 51050, University Library of Munich, Germany.
    2. repec:ehl:wpaper:127154 is not listed on IDEAS
    3. Victor Pontines & Reza Siregar, 2011. "Cross-border Bank Lending to Selected SEACEN Economies: An Integrative Report," Staff Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number sp82, April-Jun.
    4. Victor Pontines & Reza Siregar, 2012. "How Should We Bank With Foreigners? An Empirical Assessment of Lending Behaviour of International Banks to Six East Asian Countries," CAMA Working Papers 2012-04, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    5. Pontines, Victor & Siregar, Reza Y., 2014. "How should we bank with foreigners? An empirical assessment of lending behavior of international banks to six East Asian economies," International Review of Economics & Finance, Elsevier, vol. 29(C), pages 552-568.
    6. Reza Siregar, 2011. "Macro-Prudential Approaches to Banking Regulation : Perspectives of Selected Asian Central Banks," Finance Working Papers 23211, East Asian Bureau of Economic Research.
    7. Laptieva, Nataliia, 2016. "Information sharing and the volume of private credit in transition: Evidence from Ukrainian bank-level panel dataAuthor-Name: Grajzl, Peter," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 434-449.
    8. Reza Y. Siregar & C.S. Lim, Vincent, 2011. "Real Sector Propagation of the Recent Global Financial Crisis: An Integrative Report," Staff Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number sp83, April-Jun.
    9. Siregar, Reza, 2013. "Globalized Banking Sectors: Features and Policy Implications amidst Global Uncertainties," MPRA Paper 43709, University Library of Munich, Germany.
    10. Wu, Ji & Jeon, Bang Nam & Luca, Alina C., 2010. "Does Distance Affect the Performance of Foreign Banks? Evidence from Multinational Banking in Developing Countries," MPRA Paper 37083, University Library of Munich, Germany, revised 01 Feb 2012.
    11. Schlicht, Haley, 2024. "Deciphering the debt: the intersection of syndicated lending and moral hazard in East Asia’s financial crisis," LSE Research Online Documents on Economics 127154, London School of Economics and Political Science, LSE Library.
    12. Reza Siregar & Lim, C.S. Vincent, 2011. "Living with Macro-financial Linkages: Policy Perspectives and Challenges for SEACEN Countries," Staff Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number sp79, April-Jun.

    More about this item

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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