Financial Crises and the Composition of Cross-Border Lending
IMF Working Papers, October 16, 2014
Source details
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- Financial Crises and the Composition of Cross-Border Lending
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Bibliographic details
- Authors: Eugenio M Cerutti, Galina Hale, Camelia Minoiu
- Published: October 16, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484361443.001
Overview
- Examines the composition and drivers of cross-border bank lending between 1995 and 2012, distinguishing between syndicated and non-syndicated loans.
- Uses a large bilateral dataset to analyze determinants of cross-border loan exposures.
- Timeframe and scope: 1995–2012; on-balance sheet syndicated loan exposures; crisis and non-crisis comparisons.
Key empirical findings
- Syndicated loan exposures account for almost one third of total cross-border loan exposures during this period.
- Syndicated loan exposures increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis.
- Three main empirical results:
- Banks with lower levels of capital favor syndicated over other kinds of cross-border loans.
- Borrower country characteristics (level of development, economic size, and capital account openness) are less important in driving syndicated than non-syndicated loan activity, suggesting a diversification motive for syndication.
- Information asymmetries between lender and borrower countries, important in both normal and crisis times, became more binding for both types of cross-border lending activity during the recent crisis.
Data and methodology notes
- Distinguishes between syndicated and non-syndicated loans in on-balance sheet exposures.
- Employs a large bilateral dataset covering cross-border loan exposures for the period 1995–2012.
- Uses empirical analysis to isolate bank-level and borrower-country drivers of syndicated versus non-syndicated lending.
Subject areas and keywords
- Subject: Bank credit, Banking, Cross-border banking, Financial institutions, Financial services, Lines of credit, Loans, Money, Syndicated loans
- Keywords: bank assets, Bank credit, bank loan, banking system, BIS international banking statistics, borrower country, capital account, cross-border banking, Dealogic Loan Analytics, EME borrower, Global, global financial crisis, Lines of credit, loan claim, loan exposure, loan syndication market, Loans, syndicated loans, Syndicated loans, WP