Reinhardt, D. & Riddiough, S. (2014) “The two faces of cross-border banking flows: An investigation into the links between global risk, arms-length funding, and internal capital markets“, VoxEU Organisation, 07 Μαΐου.
Cross-border funding between banks collapsed following the bankruptcy of Lehman Brothers, but the withdrawal of funding was not uniform across countries. This column argues that the composition of cross-border bank-to-bank funding can help to explain why. Interbank funding between unrelated banks is particularly vulnerable to global shocks, but intragroup funding between related banks can act as a stabilising force, particularly for advanced economies with a high share of global parent banks. Policymakers should look at disaggregated cross-border bank-to-bank flows, as doing otherwise could result in a misleading assessment of financial stability risks.
Following the collapse of Lehman Brothers in September 2008, global risk spiked and the world witnessed a collapse in cross-border funding between banks. On closer inspection, however, not all countries’ banking systems experienced a withdrawal of cross-border finance. In fact, a number actually enjoyed an inflow of funding from banks overseas (Figure 1).
Σχετικές αναρτήσεις:
- Onado, M., (2014) “European banks: Between a rock (need of more capital) and a hard place (low profitability)“, VoxEU, 23 Φεβρουαρίου.
- Gros, D. (2013) “The European Banking Disunion“, Project Syndicate, 06 Νοεμβρίου.
- Barslund, M. & Busse, M. (2013) “Time to move north?“, CEPS Commentaries, 27 Μαΐου.