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Working Paper Series
Financial Crises and the Composition of Cross-Border Lending
We examine the composition and drivers of cross-border bank lending between 1995 and 2012, distinguishing between syndicated and non-syndicated loans. We show that on-balance sheet syndicated loan exposures, which account for almost one third of total cross-border loan exposures, increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis. Our empirical analysis of the drivers of cross-border loan exposures in a large bilateral dataset leads to three main results. First, banks with lower levels of capital favor syndicated over other kinds of cross-border loans. Second, borrower country characteristics such as 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. Third, information asymmetries between lender and borrower countries became more binding for both types of cross-border lending activity during the recent crisis.
Cite this item
Eugenio Cerutti & Galina Hale & Camelia Minoiu, Financial Crises and the Composition of Cross-Border Lending, Federal Reserve Bank of San Francisco, Working Paper Series 2014-20, 10 Aug 2014.
- F30 - International Economics - - International Finance - - - General
- F65 - International Economics - - Economic Impacts of Globalization - - - Finance
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
Keywords: cross-border banking; syndicated loans; global financial crisis; BIS international banking statistics; Dealogic Loan Analytics
This item with handle RePEc:fip:fedfwp:2014-20
is also listed on EconPapers
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