Financial Integration and Foreign Banks in Latin America: How Do They Impact the Transmission of External Financial Shocks?

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dc.creator Galindo, Arturo
dc.creator Izquierdo, Alejandro
dc.creator Rojas-Suárez, Liliana 2011-02-07T21:16:45Z 2011-02-07T21:16:45Z 2010-02-01 2010-02-01 2014-08-29T09:18:27Z 2014-09-09T00:27:31Z 2014-09-09T00:27:31Z 2014-09-08
dc.identifier Financial Aspects of Economic Integration
dc.identifier Financial Institutions and Services: General
dc.identifier General
dc.identifier Financial Crises
dc.identifier Banks; Depository Institutions; Micro Finance Institutions; Mortgages
dc.description This paper explores the impact of international financial integration on credit markets in Latin America, using a cross-country dataset covering 17 countries between 1996 and 2008. It is found that financial integration amplifies the impact of international financial shocks on aggregate credit and interest rate fluctuations. Nonetheless, the net impact of integration on deepening credit markets dominates for the large majority of states of nature. The paper also uses a detailed bank-level dataset that covers more than 500 banks for a similar time period to explore the role of financial integrationcaptured through the participation of foreign banksin propagating external shocks. It is found that interest rates charged and loans supplied by foreign-owned banks respond more to external financial shocks than those supplied by domestically owned banks. This does not hold for all foreign banks. Spanish banks in the sample behave more like domestic banks and do not amplify the impact of foreign shocks on credit and interest rates.
dc.format ACROBAT
dc.language en
dc.relation IDB Working Paper Series
dc.subject Crises Financeiras e Estabilização Econômica
dc.subject Financial Crises & Economic Stabilization
dc.subject Crisis financieras y estabilización económica
dc.subject Setor Financeiro
dc.subject Financial Sector
dc.subject Sector financiero
dc.subject IDB-WP-116
dc.title Financial Integration and Foreign Banks in Latin America: How Do They Impact the Transmission of External Financial Shocks?
dc.type Working Papers

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