Bank Ownership and Credit Growth in Emerging Markets During and After the 2008–09 Financial Crisis

Bank Ownership and Credit Growth in Emerging Markets During and After the 2008–09 Financial Crisis — A Cross-Regional Comparison

September 15, 2014

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Guodong Chen, and Yi Wu. Bank Ownership and Credit Growth in Emerging Markets During and After the 2008–09 Financial Crisis — A Cross-Regional Comparison, (USA: International Monetary Fund, 2014) accessed December 4, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines bank credit growth in emerging markets before, during, and after the 2008-09 financial crisis using bank-level data, focusing on the role of bank ownership. Credit growth by foreign banks lagged behind that of domestic banks in 2009 in Asia, and in 2010 in Latin America and emerging Europe. State-owned banks instead played a counter-cyclical role during the crisis in particular in Latin America and emerging Europe, and credit by stateowned banks also grew faster than that of private banks after the crisis in Latin America. Expansionary monetary policy on average led to higher credit growth. Banks in Latin America and Asia that relied more on retail funding had higher credit growth, in particular during the crisis. Better-capitalized banks and banks with more liquid assets also had faster credit growth. Finally, banks in countries with stronger banking regulation had higher credit growth during the crisis.

Subject: Bank credit, Bank regulation, Banking, Credit, Financial institutions, Financial regulation and supervision, Foreign banks, Loans, Money, State-owned banks

Keywords: Asia and Pacific, Bank credit, Bank ownership, Bank regulation, Bank size, Central and Eastern Europe, Credit, Credit growth, Europe, Financial crisis, Foreign bank, Foreign banks, Funding cost, Loans, Ownership data, Parent bank, Parent bank home country CDS, State bank dummy, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/171
Stock No:

WPIEA2014171
ISBN:

9781484390993
ISSN:

1018-5941

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