Financial Dollarization: Short-Run Determinants in Transition Economies
This paper examines the determinants of financial dollarization in transition economies from a short-run perspective. Using monthly data of deposit and loan dollarization we study the drivers of short-term fluctuations in dollarization and test their importance at different levels of dollarization. The results provide evidence that (a) the positive short-run effects of depreciation on deposit dollarization are exacerbated in high-dollarization countries; (b) short-run loan dollarization is mainly driven by banks matching of domestic loans and deposits, international financial integration, and institutional quality; and (c) both types of dollarization are affected by interest rate differentials and deviations from desired dollarization.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (0)161 275 4868
Fax: (0)161 275 4812
Web page: http://www.socialsciences.manchester.ac.uk/subjects/economics/our-research/centre-for-growth-and-business-cycle-research/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Arteta Carlos O., 2005. "Exchange Rate Regimes and Financial Dollarization: Does Flexibility Reduce Currency Mismatches in Bank Intermediation?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-30, May.
- Eduardo Levy Yeyati & Alejandro Micco, 2003.
"Concentration and Foreign Penetration in Latin American Banking Sectors: Impact on Competition and Risk,"
Research Department Publications
4353, Inter-American Development Bank, Research Department.
- Yeyati, Eduardo Levy & Micco, Alejandro, 2007. "Concentration and foreign penetration in Latin American banking sectors: Impact on competition and risk," Journal of Banking & Finance, Elsevier, vol. 31(6), pages 1633-1647, June.
- Eduardo Levy Yeyati & Alejandro Micco, 2003. "Concentration and Foreign Penetration in Latin American Banking Sectors: Impact on Competition and Risk," Business School Working Papers cinco, Universidad Torcuato Di Tella.
- Carlos Óscar Arteta, 2003.
"Exchange Rate Regimes and Financial Dollarization: Does Flexibility Reduce Bank Currency Mismatches?,"
- Carlos O. Arteta, 2002. "Exchange rate regimes and financial dollarization: does flexibility reduce bank currency mismatches?," International Finance Discussion Papers 738, Board of Governors of the Federal Reserve System (U.S.).
- Rioja, Felix & Valev, Neven, 2004. "Does one size fit all?: a reexamination of the finance and growth relationship," Journal of Development Economics, Elsevier, vol. 74(2), pages 429-447, August.
- Leo Bonato & Andreas Billmeier, 2002. "Exchange Rate Pass-Through and Monetary Policy in Croatia," IMF Working Papers 02/109, International Monetary Fund.
- Miguel A. Savastano, 1996. "Dollarization in Latin America: Recent Evidence and Some Policy Issues," IMF Working Papers 96/4, International Monetary Fund.
- Robert Rennhack & Masahiro Nozaki, 2006. "Financial Dollarization in Latin America," IMF Working Papers 06/7, International Monetary Fund.
- Christoph B. Rosenberg & Marcel TirpÃ¡k, 2008. "Determinants of Foreign Currency Borrowing in the New Member States of the EU," IMF Working Papers 08/173, International Monetary Fund.
- Marco Terrones & Luis CatÃ£o, 2000. "Determinants of Dollarization: The Banking Side," IMF Working Papers 00/146, International Monetary Fund.
- Fabio Fornari & Antonio Mele, 1997. "Asymmetries and non-linearities in economic activity," Applied Financial Economics, Taylor & Francis Journals, vol. 7(2), pages 203-206.
- Martin Uribe, 1995.
"Hysteresis in a simple model of currency substitution,"
International Finance Discussion Papers
509, Board of Governors of the Federal Reserve System (U.S.).
- Uribe, Martin, 1997. "Hysteresis in a simple model of currency substitution," Journal of Monetary Economics, Elsevier, vol. 40(1), pages 185-202, September.
- Patrick Honohan, 2007.
"Dollarization and Exchange Rate Fluctuations,"
The Institute for International Integration Studies Discussion Paper Series
- De Nicolo, Gianni & Honohan, Patrick & Ize, Alain, 2003.
"Dollarization of the banking system : good or bad?,"
Policy Research Working Paper Series
3116, The World Bank.
- Basso, Henrique S. & Calvo-Gonzalez, Oscar & Jurgilas, Marius, 2007. "Financial dollarization: the role of banks and interest rates," Working Paper Series 0748, European Central Bank.
- Bertus, Mark & Jahera Jr., John S. & Yost, Keven, 2008. "A note on foreign bank ownership and monitoring: An international comparison," Journal of Banking & Finance, Elsevier, vol. 32(2), pages 338-345, February.
- Eduardo Levy Yeyati, 2005.
"Financial Dollarisation: Evaluating The Consequences,"
Business School Working Papers
findollarisation, Universidad Torcuato Di Tella.
- Eduardo Levy Yeyati, 2006. "Financial dollarization: evaluating the consequences," Economic Policy, CEPR;CES;MSH, vol. 21(45), pages 61-118, 01.
- Eduardo Levy-Yeyati, 2004. "FINANCIAL DOLLARIZATION: Evaluating the consequences," Econometric Society 2004 Latin American Meetings 184, Econometric Society.
- Ize, Alain & Yeyati, Eduardo Levy, 2003. "Financial dollarization," Journal of International Economics, Elsevier, vol. 59(2), pages 323-347, March.
- Berger, Allen N., 2007. "Obstacles to a global banking system: "Old Europe" versus "New Europe"," Journal of Banking & Finance, Elsevier, vol. 31(7), pages 1955-1973, July.
- Engle, Robert, 2002. "Dynamic Conditional Correlation: A Simple Class of Multivariate Generalized Autoregressive Conditional Heteroskedasticity Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(3), pages 339-50, July.
- Luca, Alina & Petrova, Iva, 2008. "What drives credit dollarization in transition economies?," Journal of Banking & Finance, Elsevier, vol. 32(5), pages 858-869, May.
- Adolfo Barajas & Armando MÃ©ndez Morales, 2003. "Dollarization of Liabilities: Beyond the Usual Suspects," IMF Working Papers 03/11, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:man:cgbcrp:113. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marianne Sensier)
If references are entirely missing, you can add them using this form.