Board of Governors of the Federal Reserve System (U.S.)
International Finance Discussion Papers
The Effect of Foreign Lending on Domestic Loans : An Analysis of U.S. Global Banks
This paper examines the effect of foreign lending on the domestic lending for US global banks. We show that greater foreign loan growth complements, rather than detracts from, domestic commercial lending. Exploiting a confidential data (FFIEC 009) on international loan exposure of US banks, we estimate that a 1% increase in foreign office lending is associated with a 0.6% growth in domestic commercial lending, suggesting complementarity across these lending channels. However, when capital raising is tight during the Global Financial Crisis of 2008, we find that foreign lending did come at the expense of domestic lending.
Cite this item
Edith X. Liu & Jonathan Pogach, The Effect of Foreign Lending on Domestic Loans : An Analysis of U.S. Global Banks, Board of Governors of the Federal Reserve System (U.S.), International Finance Discussion Papers 1198, Feb 2017.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Keywords: Multinational ; Global Banking ; Commercial Loans ; Foreign Investments
This item with handle RePEc:fip:fedgif:1198
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