Banking on Foreigners: The Behavior of International Bank Lending to Latin America, 1985-2000

38 Pages Posted: 20 Apr 2016

See all articles by Maria Soledad Martinez Peria

Maria Soledad Martinez Peria

International Monetary Fund (IMF)

Andrew Powell

Universidad Torcuato Di Tella - School of Business; Inter-American Development Bank (IDB); Harvard University - Center for International Development (CID)

Ivanna Vladkova Hollar

International Monetary Fund (IMF)

Date Written: 09/26/2002

Abstract

Rising international bank financing to developing countries has fueled a debate on the behavior of these claims. The authors analyze claims from seven home (lender) countries on ten host (borrower) countries in Latin America. They find that banks transmit shocks from their home countries and changes in their claims on other countries spill over to individual hosts. However, lending has become less "indiscriminate" and more responsive to host conditions over time. Responsiveness to the latter becomes less "pro-cyclical" as exposure increases. Finally, foreign bank lending reacts more to positive than to negative host shocks and is not significantly curtailed during crises.

This paper - a product of Finance, Development Research Group - is part of a larger effort in the group to study foreign bank lending.

Suggested Citation

Martinez Peria, Maria Soledad and Powell, Andrew P. and Vladkova Hollar, Ivanna, Banking on Foreigners: The Behavior of International Bank Lending to Latin America, 1985-2000 (09/26/2002). World Bank Policy Research Working Paper No. 2893. Available at SSRN: https://ssrn.com/abstract=636256

Maria Soledad Martinez Peria

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Andrew P. Powell (Contact Author)

Universidad Torcuato Di Tella - School of Business ( email )

Saenz Valiente 1010
C1428BIJ Buenos Aires
Argentina
+5411 4787-9349 (Phone)
+5411 4783-3220 (Fax)

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Harvard University - Center for International Development (CID) ( email )

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79 JFK Street
Cambridge, MA 02138
United States

Ivanna Vladkova Hollar

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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