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What drives local lending by global banks?

Author

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  • Uluc Aysun

    () (University of Central Florida, Orlando, FL)

  • Stefan Avdjiev

    () (Bank for International Settlements, Basel, Switzerland)

  • Ralf Hepp

    () (Fordham University, New York, NY)

Abstract

We find that the lending behavior of large global banks’ subsidiaries throughout the world is more closely related to local macroeconomic conditions and their financial structure than to their owner-specific counterparts. This inference is drawn from a panel dataset populated with bank-level observations from the Bankscope database. Using this database, we identify ownership structures and incorporate them into a unique methodology that identifies and compares the owner and subsidiary-specific determinants of lending. A distinctive feature of our analysis is that we use multi- dimensional country-level data from the BIS international banking statistics to account for exchange rate fluctuations and cross-border lending

Suggested Citation

  • Uluc Aysun & Stefan Avdjiev & Ralf Hepp, 2017. "What drives local lending by global banks?," Working Papers 2017-02, University of Central Florida, Department of Economics.
  • Handle: RePEc:cfl:wpaper:2017-02
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    More about this item

    Keywords

    Bankscope; G-SIB; bank-level data; global banks; BIS international banking statistics;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • 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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