International Banking Amidst COVID-19: Resilience and Drivers

11 Pages Posted: 11 Dec 2020

See all articles by Bryan Hardy

Bryan Hardy

Bank for International Settlements (BIS) - Monetary and Economic Department

Elod Takats

Bank for International Settlements

Date Written: December 7, 2020

Abstract

The claims of international banks held up well during the COVID-19 crisis, although economic output fell by even more than during the Great Financial Crisis (GFC). Both cross-border and local claims were resilient, in advanced and emerging market economies alike. Looking at lending to the real economy, we examine how borrower and lender characteristics relate to the growth of claims on the private non-financial sector during the pandemic. We find that countries with stronger economic activity and smaller financial vulnerabilities borrowed more. Likewise, better capitalised banking systems lent more. The economic stress also led advanced economy borrowers to draw on pre-existing credit lines from foreign banks.

JEL Classification: F34, G01, G21

Suggested Citation

Hardy, Bryan and Takats, Elod, International Banking Amidst COVID-19: Resilience and Drivers (December 7, 2020). Available at SSRN: https://ssrn.com/abstract=3746155 or http://dx.doi.org/10.2139/ssrn.3746155

Bryan Hardy

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Elod Takats (Contact Author)

Bank for International Settlements ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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