@misc{10199,
title = {Loyal Lenders or Fickle Financiers: Foreign Banks in Latin America},
author = {Galindo, Arturo and Micco, Alejandro and Powell, Andrew},
year = {2011},
doi = {10.18235/0010962},
abstract = {We suggest that foreign banks may represent a trade-off for their developing country hosts. A portfolio model is developed to show that a more diversified international bank may be one of lower, overall risk and less susceptible to funding shocks but may react more to shocks that affect expected returns in a particular host country. Foreign banks have become particularly important in Latin America where we find strong support for these theoretical predictions using a dataset of individual Latin American banks in 11 countries. Moreover, we find no significant difference between the size of the response of foreign banks to a negative liquidity shock and a positive opportunity shock: in both cases the market share of foreign banks in credit increases.},
url = {https://doi.org/10.18235/0010962}
}