International shock transmission after the Lehman Brothers collapse – evidence from syndicated lending
After Lehman Brothers filed for bankruptcy in September 2008, cross-border bank lending contracted sharply. To explain the severity and variation in this contraction, we analyse detailed data on cross-border syndicated lending by 75 banks to 59 countries. We find that banks that had to write down sub-prime assets, refinance large amounts of long-term debt, and experienced sharp declines in their market-to-book ratio, transmitted these shocks across borders by curtailing their lending abroad. While shocked banks differentiated among countries in much the same way as less constrained banks, they restricted their lending more to small borrowers.
|Date of creation:||Jan 2012|
|Date of revision:|
|Publication status:||Published in Working papers 142, European Bank for Reconstruction and Development|
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