lending channel in emerging economies
Subtitle: are foreign banks different?
By: Marco Arena, Carmen Reinhart, Francisco Vázquez.
Contributors: Reinhart, Carmen M.; Vázquez, Francisco F.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 12340.; Working paper series (National Bureau of Economic Research) -- working paper no. 12340.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 62
Subjects: Banks and banking -- Asia -- Mathematical models; Banks and banking -- Latin America -- Mathematical models
Other titles: lending channel in emerging economics.
Description: "This paper assembles a dataset comprising 1,565 banks in 20 Asian and Latin American countries during 1989-2001 and compares the response of the volume of loans, deposits, and bank-specific interest rates on loans and deposits, to various measures of monetary conditions, across domestic and foreign banks.  It also looks for systematic differences in the behavior of domestic and foreign banks during periods of financial distress and tranquil times.  Using differences in bank ownership as a proxy for financial constraints on banks, the paper finds weak evidence that foreign banks have a lower sensitivity of credit to monetary conditions relative to their domestic competitors, with the differences driven by banks with lower asset liquidity and/or capitalization.  At the same time, the lending and deposit rates of foreign banks tend to be smoother during periods of financial distress, albeit the differences with domestic banks do not appear to be strong.  These results provide weak support to the existence of supply-side effects in credit markets and suggest that foreign bank entry in emerging economies may have contributed somewhat to stability in credit markets"--National Bureau of Economic Research web site.
Notes: "June 2006."

Includes bibliographical references (p. 30-31).

Also available in PDF from the NBER world wide web site (www.nber.org).