Title The global credit crunch and foreign banks' lending to emerging markets : why did Latin America fare better? / prepared by Herman Kamil and Kulwant Rai

Published [Washington, D.C.] : International Monetary Fund, [2010], ©2009

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Description 1 online resource (33 pages) : illustrations, maps Series IMF working paper ; WP/10/102 IMF working paper ; WP/10/102. Contents Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Data and Stylized Facts for Latin America; A. BIS Data; B. Key Features of Foreign Banks' Involvement in LAC; 1. Share of Banking Assets Held in Subsidiaries or Branches of Global Foreign Banks; 2. Foreign Banks' Lending as a Share of GDP, 2008; 3. Share of Foreign Banks' Lending Extended through their Local Affiliates, 2008; 4. Deposit-to-Loan Ratios in Foreign-Owned Local Affiliates, 2007; 5. Foreign Banks' Cross-Border Lending to Banking Sector in Emerging Markets, 2008 6. Share of Foreign Banks' Lending Denominated in Local Currency, 20087. Total Foreign Banks' Lending in Foreign Currency in Emerging Markets; 8. Foreign Lending by Bank Nationality; III. Empirical Strategy; IV. Main Econometric Results; 1. Foreign Banks' Lending to LAC: Developments as of end-June 2009; 2. Determinants of Foreign Banks' Lending to Latin America; V. Was There a Retrenchment Post-Lehman? Latest Cross-Regional Evidence; 9. Growth in Foreign Banks' Lending, by Region; 10. Change in Foreign Banks' Total Outstanding Claims since Lehman Demise, by Region 11. Channels of Foreign Banks' Lending to LAC: Differences in their Behavior12. Spanish Banks Compared to U.S. Banks in Terms of Lending to LAC; 13. Total Foreign Banks' Lending to LAC Region; 14. Three-Month Money Market Spreads; 15. Financial Stress of Global Banks in Advanced Countries; 16. Reported Tightening in U.S. Banks' Lending Standards; VI. Interpreting the Evidence; VII. Conclusion; Appendix; References; Footnotes Summary "The recent global financial turmoil raised questions about the stability of foreign banks' financing to emerging market countries. While foreign banks' lending growth to most emerging market regions contracted sharply, lending to Latin America and the Caribbean (LAC) was significantly more resilient. Analyzing detailed BIS data on global banks' lending to LAC countries - whether extended directly by their headquarters abroad or by their local affiliates in host countries - we show that the propagation of the global credit crunch was significantly more muted in countries where most of foreign banks' lending was channeled in domestic currency. We also show that foreign banks' involvement in LAC has differed in fundamental ways from that in other regions, with most of their lending to LAC conducted by their local subsidiaries, denominated in domestic currency and funded from a domestic deposit base. These characteristics help explain why LAC has not been struck as hard as other emerging markets by the global deleveraging and pullback in foreign banks' lending."--Abstract Bibliography Includes bibliographical references (pages 30-33) Subject Banks and banking, Foreign -- Latin America Loans, Foreign -- Latin America Banks and banking, International -- Latin America Banks and banking, Foreign Banks and banking, International Loans, Foreign Latin America Form Electronic book Author Rai, Kulwant, author International Monetary Fund. Western Hemisphere Department, issuing body. ISBN 1282845918 9781282845916 1455200107 9781455200108 9781452737935 1452737932 9781455200610 1455200611

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