Bank Recycling of Petro Dollars to Emerging Market Economies During the Current Oil Price Boom.

By: Wiegand, JohannesMaterial type: TextTextSeries: IMF Working PapersPublisher: Washington : International Monetary Fund, 2008Copyright date: ©2008Description: 1 online resource (28 pages)Content type: text Media type: computer Carrier type: online resourceISBN: 9781451914917Subject(s): Banks and banking -- Econometric models | Capital movements -- Econometric models | Petroleum industry and trade -- Economic aspects -- Econometric modelsGenre/Form: Electronic books.Additional physical formats: Print version:: Bank Recycling of Petro Dollars to Emerging Market Economies During the Current Oil Price BoomDDC classification: 332.820971 LOC classification: HG3891 -- .W54 2008ebOnline resources: Click to View
Contents:
Intro -- Contents -- I. Introduction -- II. Data and Some Stylized Facts -- III. Identification and Estimation Strategy -- IV. Results -- A. Descriptive Statistics -- B. Basic Estimation Results -- C. Detailed Results -- D. Region Specific Estimates -- E. Robustness Checks and Extensions -- Parameter Stability -- Dynamic Specifications -- Feedback and Reverse Causality -- Assets and Liabilities vs. Loans and Deposits -- V. Summary: Key Results and Implications for Emerging Market Vulnerabilities -- References -- Figures -- 1. Bank Flows to Emerging Markets, 1970-1985 -- 2. Emerging Markets: Current Account, 1970-2007 -- 3. Identifying and Estimating Petro-Dollar Bank Flows: Basic Scheme -- 4. Identifying and Estimating Petro-Dollar Bank Flows: Extended Scheme -- 5. Cross-Border Loans, 1990-2007 -- 6. Bank Loans by Recipient Region -- 7. Regression Residuals -- 8. Re-Recursive Estimation -- 9. Non-Loan Asset Flows, 1996-2007 -- Tables -- 1. Emerging Markets: Current Account Position by Region -- 2. Oil Exporters: External Position and Deposit Flows into BIS-Reporting Banks, 2001-06 -- 3. Correlation of Deposit Outflows with the IMF Average Oil Price. -- 4. Quarterly Flows into and out of BIS Reporting Bank, Q2 2001-Q4 2006... -- 5. Basic Regression Results -- 6. Extended Regression Results -- 7. Region Specific Estimates -- 8. Dynamic Specifications -- 9. Feedback -- 10. Assets and Liabilities -- Appendices -- I. Country and Territory Groupings -- II. Detailed Descriptive Statistics.
Summary: High oil prices have once again led to large external surpluses of oil exporting countries, similar to the 1970s and 1980s. This paper analyzes the extent to which (i) oil exporters use bank deposits to invest these surpluses, and (ii) banks are lending on these funds to emerging market economies. Bank recycling of petro dollars to emerging market economies is found to be almost as important as in the 1970s and 1980s, even though during the current boom, petro dollar bank flows tend to originate in countries like Russia, Libya, or Nigeria rather than in the Middle East. As one consequence, a fall in oil prices could yet again disrupt financing flows to emerging economies. Especially at risk could be countries that rely heavily on bank loans to finance external deficits, many of them in Emerging Europe.
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Intro -- Contents -- I. Introduction -- II. Data and Some Stylized Facts -- III. Identification and Estimation Strategy -- IV. Results -- A. Descriptive Statistics -- B. Basic Estimation Results -- C. Detailed Results -- D. Region Specific Estimates -- E. Robustness Checks and Extensions -- Parameter Stability -- Dynamic Specifications -- Feedback and Reverse Causality -- Assets and Liabilities vs. Loans and Deposits -- V. Summary: Key Results and Implications for Emerging Market Vulnerabilities -- References -- Figures -- 1. Bank Flows to Emerging Markets, 1970-1985 -- 2. Emerging Markets: Current Account, 1970-2007 -- 3. Identifying and Estimating Petro-Dollar Bank Flows: Basic Scheme -- 4. Identifying and Estimating Petro-Dollar Bank Flows: Extended Scheme -- 5. Cross-Border Loans, 1990-2007 -- 6. Bank Loans by Recipient Region -- 7. Regression Residuals -- 8. Re-Recursive Estimation -- 9. Non-Loan Asset Flows, 1996-2007 -- Tables -- 1. Emerging Markets: Current Account Position by Region -- 2. Oil Exporters: External Position and Deposit Flows into BIS-Reporting Banks, 2001-06 -- 3. Correlation of Deposit Outflows with the IMF Average Oil Price. -- 4. Quarterly Flows into and out of BIS Reporting Bank, Q2 2001-Q4 2006... -- 5. Basic Regression Results -- 6. Extended Regression Results -- 7. Region Specific Estimates -- 8. Dynamic Specifications -- 9. Feedback -- 10. Assets and Liabilities -- Appendices -- I. Country and Territory Groupings -- II. Detailed Descriptive Statistics.

High oil prices have once again led to large external surpluses of oil exporting countries, similar to the 1970s and 1980s. This paper analyzes the extent to which (i) oil exporters use bank deposits to invest these surpluses, and (ii) banks are lending on these funds to emerging market economies. Bank recycling of petro dollars to emerging market economies is found to be almost as important as in the 1970s and 1980s, even though during the current boom, petro dollar bank flows tend to originate in countries like Russia, Libya, or Nigeria rather than in the Middle East. As one consequence, a fall in oil prices could yet again disrupt financing flows to emerging economies. Especially at risk could be countries that rely heavily on bank loans to finance external deficits, many of them in Emerging Europe.

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Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2018. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.

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