TY  - BOOK
AU  - Aiyar,Shekhar
AU  - Jain-Chandra,Sonali
TI  - The Domestic Credit Supply Response to International Bank Deleveraging: Is Asia Different? 
T2  - IMF Working Papers; Working Paper
SN  - 1475580916 :
SN  - 1018-5941
PY  - 2012///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - Bank for International Settlements
KW  - imf
KW  - Bank Lending
KW  - Banking
KW  - Claims
KW  - Cross-Border Lending
KW  - General
KW  - Australia
KW  - Hong Kong Special Administrative Region of China
KW  - United Kingdom
N2  - During the global financial crisis, European banks contracted foreign claims on recipient economies sharply. This paper examines the impact of that deleveraging on credit supply in recipient economies, with a particular focus on Asia. Identification is achieved by exploiting heterogeneity in ex-ante patterns of funding reliance on different European banking systems, and in variation in the ratio of local claims in local currency to total foreign claims in recipient economies. These sources of variation are used to create instruments for the deleveraging shock. We find that the contraction in European bank foreign claims was associated with a substantial reduction in domestic credit supply in a broad sample of countries. However, the credit supply response in Asia was only about half the size of the response in non-Asian countries, possibly due to a more robust policy response and healthier local bank balance sheets at the outset of the crisis
UR  - http://elibrary.imf.org/view/IMF001/20064-9781475580914/20064-9781475580914/20064-9781475580914.xml
UR  - http://www.imfbookstore.org/IMFORG/9781475580914
ER  -