Bank Ownership and Credit Growth in Emerging Markets During and After the 2008-09 Financial Crisis - A Cross-Regional Comparison
IMF
Download Document| Date Published | 2014 |
| Version | |
| Primary Author | Guodong Chen |
| Other Authors | Yi Wu |
| Theme | Housing Finance and the Economy |
| Country |
Abstract
This paper examines credit growth in emerging markets before, during, and after the 2008-09 financial crisis using bank-level data, focusing on the role of bank ownership. Credit growth by foreign banks lagged behind that of domestic banks in Asia, and in 2010 in Latin America and emerging Europe. State-owned banks instead played a counter-cyclical role during the crisis in particular in Latin America and emerging Europe, and credit by state-owned banks also grew faster that that of private banks after the crisis in Latin America. Expansionary monetary policy on average led to higher credit growth. Banks in Latin America and Asia that relied more on retail funding had credit growth, in particular during the crisis. Better capitalized banks and banks with more liquid assets had faster credit growth. Finally, banks in countries with stronger banking regulation had higher credit growth during the crisis.