Foreign Bank Behavior during Financial Crises

摘要

This paper studies whether lending by foreign banks is affected by financial crises. We pair a bank-level data set of foreign ownership with information on banking crises and examine whether the credit supply of majority foreign-owned banks that underwent home-country crises differ systematically from those of other foreign banks. In contrast to the literature, our broad global coverage allows us to exploit variations between foreign banks; this enables us to identify an average treatment effect directly attributable to crises. Our baseline results show that banks exposed to home-country crises between 2007-08 exhibit changes in lending patterns that are lower by between 13% and 42% than their noncrisis counterparts. This finding is robust to potential alternative explanations, and also holds, though less strongly, for the 1997/98 Asian crisis.