![]() ![]() However, the differences across domestic and foreign banks do not appear to be strong. The lending and deposit rates of foreign banks tend to be smoother during periods of financial distress. Using differences in bank ownership as a proxy for financial constraints, the paper finds weak evidence that foreign banks have a lower sensitivity of credit to monetary conditions relative to their domestic competitors, with the differences driven by banks with lower asset liquidity and/or capitalization. It also looks for systematic differences in the behavior of domestic and foreign banks during periods of financial distress and tranquil times. ![]() ![]() This paper exploits a panel dataset comprising 1,565 banks in 20 emerging countries during 1989- 2001 and compares the response of the volume of loans and the rates on loans and deposits to various measures of monetary conditions across domestic and foreign banks. ![]()
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