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International Banking and Liquidity Risk Transmission: Evidence from the United States
The balance sheet structure of U.S. banks influences how they respond to liquidity risks. We find the responses differ in fundamental ways across banks without foreign affiliates vs. those with foreign affiliates. Among banks without foreign affiliates, cross-sectional differences in response to liq...
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| Published in: | IMF economic review 2015-11, Vol.63 (3), p.626-643 |
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| Main Authors: | , , |
| Format: | Article |
| Language: | English |
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| cites | cdi_FETCH-LOGICAL-c560t-1df8307db671b1b0bdbefcb167481aceb6fc5ddbe1b67c6f46312be67e4859ab3 |
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| container_title | IMF economic review |
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| creator | CORREA, RICARDO GOLDBERG, LINDA S. RICE, TARA |
| description | The balance sheet structure of U.S. banks influences how they respond to liquidity risks. We find the responses differ in fundamental ways across banks without foreign affiliates vs. those with foreign affiliates. Among banks without foreign affiliates, cross-sectional differences in response to liquidity risk depend on the banks' shares of core deposit funding, Tier 1 capital, and outstanding credit commitments. Among banks with foreign affiliates, the global banks, liquidity management strategies as reflected in interanl borrowing and lending across the global organization matter. This intrabank borrowing serves as a shock absorber and affects lending growth to domestic and foreign customers. Across all banks, the use of official sector emergency liquidity facilities tends to reduce the importance of ex ante differences in balance sheets as drivers of cross-sectional differences in lending in response to market liquidity risks. |
| doi_str_mv | 10.1057/imfer.2015.28 |
| format | article |
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We find the responses differ in fundamental ways across banks without foreign affiliates vs. those with foreign affiliates. Among banks without foreign affiliates, cross-sectional differences in response to liquidity risk depend on the banks' shares of core deposit funding, Tier 1 capital, and outstanding credit commitments. Among banks with foreign affiliates, the global banks, liquidity management strategies as reflected in interanl borrowing and lending across the global organization matter. This intrabank borrowing serves as a shock absorber and affects lending growth to domestic and foreign customers. 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| ispartof | IMF economic review, 2015-11, Vol.63 (3), p.626-643 |
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| source | EBSCOhost Econlit with Full Text; JSTOR Archival Journals and Primary Sources Collection; Social Science Premium Collection; ABI/INFORM Global; Politics Collection; Springer Nature:Jisc Collections:Springer Nature Read and Publish 2023-2025: Springer Reading List; PAIS Index |
| subjects | Affiliates Analysis Balance sheets Bank assets Bank capital Bank credit Bank holding companies Bank liquidity Bank loans Banking Banking industry Banks Borrowing Capital Capital Markets Credit Economic crisis Economic Policy Economic statistics Economic theory Economics Economics and Finance F42 Finance Foreign banks Foreign residents Funding G01 G21 International banking International Economics International finance International lending International liquidity Liquidity Liquidity (Finance) Liquidity risk Loans Macroeconomics/Monetary Economics//Financial Economics Management Risk Studies |
| title | International Banking and Liquidity Risk Transmission: Evidence from the United States |
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