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| dc.title | Loyal Lenders or Fickle Financiers: Foreign Banks in Latin America |
| dc.contributor.author | Galindo, Arturo |
| dc.contributor.author | Micco, Alejandro |
| dc.contributor.author | Powell, Andrew |
| dc.contributor.orgunit | Department of Research and Chief Economist |
| dc.coverage | The Caribbean |
| dc.coverage | Central America |
| dc.coverage | South America |
| dc.date.available | 2011-02-07T00:00:00 |
| dc.date.issue | 2005-12-01T00:00:00 |
| dc.description.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. |
| dc.identifier.doi | http://dx.doi.org/10.18235/0010962 |
| dc.identifier.url | https://publications.iadb.org/publications/english/document/Loyal-Lenders-or-Fickle-Financiers-Foreign-Banks-in-Latin-America.pdf |
| dc.language.iso | en |
| dc.medium | Adobe PDF |
| dc.publisher | Inter-American Development Bank |
| dc.subject | Financial Sector |
| dc.subject.keywords | WP-529 |
| dc.type | Working Papers |
| idb.identifier.pubnumber | Working Papers |