Foreign Banks and the Vienna Initiative: Turning Sinners Into Saints?

By Ralph De Haas, Yevgeniya Korniyenko, Alexander Pivovarsky, Elena Loukoianova

May 1, 2012

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Ralph De Haas, Yevgeniya Korniyenko, Alexander Pivovarsky, and Elena Loukoianova. Foreign Banks and the Vienna Initiative: Turning Sinners Into Saints?, (USA: International Monetary Fund, 2012) accessed December 22, 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

We use data on 1,294 banks in Central and Eastern Europe to analyze how bank ownership and creditor coordination in the form of the Vienna Initiative affected credit growth during the 2008–09 crisis. As part of the Vienna Initiative western European banks signed country-specific commitment letters in which they pledged to maintain exposures and to support their subsidiaries in Central and Eastern Europe. We show that both domestic and foreign banks sharply curtailed credit during the crisis, but that foreign banks that participated in the Vienna Initiative were relatively stable lenders. We find no evidence of negative spillovers from countries where banks signed commitment letters to countries where they did not.

Subject: Bank credit, Banking, Credit, Financial crises, Financial institutions, Foreign banks, Loans, Money

Keywords: Bank credit, Bank lending, Bank subsidiary, Central and Eastern Europe, Credit, Credit growth, Europe, Financial Crisis, Foreign Banks, Government support, Loans, Loan-to-deposit ratio, Parent bank, Roll-over commitment, State Support, VI bank, Vienna Initiative, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/117
Stock No:

WPIEA2012117
ISBN:

9781475503463
ISSN:

1018-5941

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