Cross-border banking, credit access, and the financial crisis

Popov, Alexander; Udell, Gregory F.

doi:10.1016/j.jinteco.2012.01.008

Cited by 397 publications

(285 citation statements)

References 68 publications

Supporting

Mentioning

273

Contrasting

Order By: Relevance

“…To identify credit constrained firms, we follow the methodology adopted by Popov and Udell (2012) and Léon (2015) by grouping firms that were turned down and firms that were discouraged from applying.…”

Section: Variablesmentioning

confidence: 99%

See 1 more Smart Citation

Islamic banking development and access to credit

Léon

Weill

2018

Pacific-Basin Finance Journal

View full text Add to dashboard Cite

The recent expansion of Islamic banks raises questions on its economic implications. The aim of this paper is to investigate the impact of Islamic banking development on access to credit. We combine data from a unique hand-collected database that covers Islamic banks over the period of 2000 to 2005 with firm-level data covering developing and emerging countries. We find that Islamic banking development has overall no impact on credit constraints, while banking development and conventional banking development alleviate obstacles to financing. However Islamic banking development exerts a positive impact on access to credit when conventional banking development is low. Hence we support the view that Islamic banking does not overall alleviate obstacles to financing, but it can act as substitute to conventional banking.JEL Codes: G21, O16.

show abstract

Section: Variablesmentioning

confidence: 99%

“…Firm-level variables come from World Bank Enterprise Survey which includes information on credit constraints at the firm level on a large set of countries. In line with Popov and Udell (2012), we define a firm as 3 credit-constrained when it was either discouraged from applying a loan or was rejected when it applied.…”

Section: Introductionmentioning

confidence: 99%

Islamic banking development and access to credit

Léon

Weill

2018

Pacific-Basin Finance Journal

View full text Add to dashboard Cite

show abstract

“…Specifically, MSMEs often come into trouble when they have to provide good collateral for the loan officers (Cowan, Drexler, and Yañ ez 2015;Öztü rk and Mrkaic 2014;Vos et al 2007). Additionally, in times of crisis -like the one that recently occurred in Europe -liquidity shortages and credit restrictions have further weakened the access to bank loans for MSMEs (Popov and Van Horen 2015;Popov and Udell 2012). This is not inconsequential, given that MSMEs are important drivers of the European economy.…”

Section: Introductionmentioning

confidence: 99%

Small Firms, Corruption, and Demand for Credit. Evidence from the Euro Area

Galli¹,

Mascia²,

Rossi³

2017

IBR

View full text Add to dashboard Cite

In this paper, we aim to assess how the quality of the institutional environment -identified according to the level of corruption perceived in a country -may affect the access to credit for micro, small, and medium-sized enterprises (MSMEs). Based on a sample of 68,115 observations -drawn from the ECB-SAFE survey -related to MSMEs chartered in 11 euro area countries, we investigate whether the level of corruption affects their demand for bank loans during the period 2009-2014.Overall, we find that the degree of corruption seems to play a role in the applications for bank loans when small firms are under investigation. Interestingly, results highlight that small businesses chartered in highly corrupt countries face a greater probability of self-restraint regarding their loan applications (about 7.4%) than small firms located in low-corruption economies (around 6%). The results are robust to various model specifications and econometric methodologies. Our findings suggest that anti-corruption policies and measures enhancing transparency in the economy may be crucial in reducing the negative spillovers generated by a low-quality institutional environment on the access to credit by small firms.

show abstract

“…Banks reduced credit supply mainly in countries geographically distant from their home country, countries where foreign banks were less experienced, where they operated under a branch structure, and where they were disintegrated from the network of domestic co-lenders. Popov and Udell (2012) study whether contraction of lending provided by foreign banks may be sensitive to parent banks' balance sheet conditions. They find that firms in emerging market countries experienced more difficulty obtaining credit from foreign banks whose parent banks suffered from negative shocks to their financial conditions.…”

Section: Introductionmentioning

confidence: 99%

“…For instance, banks or banking group with low capital buffers prior to a tightening in capital regulation might respond differently to those holding a higher capital buffer (Popov and Udell, 2012). Similarly, Mora (2014) suggests that banks holding lower excess reserves are likely to reduce their lending more to absorb an increase in required reserves relative to banks holding higher excess reserves.…”

Section: Introductionmentioning

confidence: 99%

On a Tight Leash: Does Bank Organisational Structure Matter for Macroprudential Spillovers?

2015

View full text Add to dashboard Cite

This paper examines whether cross-border spillovers of macroprudential regulation depend on the organisational structure of banks' foreign affiliates. Our analysis compares the response of foreign banks' branches versus subsidiaries in the UK to changes in macroprudential regulations in foreign banks' home countries. By focusing on branches and subsidiaries of the same banking group, we are able to control for all the factors affecting parent banks' decisions regarding the lending of their foreign affiliates. We document that there are important differences between the type of regulation and the type of lending. Following a tightening of capital regulation, branches of multinational banks reduce interbank lending growth in the UK by 6.3pp more relative to subsidiaries of the same banking group. Lending to non-bank borrowers does not exhibit such differences. A tightening in lending standards or reserve requirements at home does not have differential effects on both interbank and non-bank lending in the UK. Keywords AbstractThis paper examines whether cross-border spillovers of macroprudential regulation depend on the organisational structure of banks' foreign affiliates. Our analysis compares the response of foreign banks' branches versus subsidiaries to changes in macroprudential regulations in foreign banks' home countries. By focusing on branches and subsidiaries of the same banking group, we are able to control for all the factors affecting parent banks' decisions regarding the lending of their foreign affiliates. We document that there are important differences between the type of regulation and the type of lending. Following a tightening of capital regulation, branches of multinational banks reduce interbank lending growth in the UK by 6.3pp more relative to subsidiaries of the same banking group. Lending to non-bank borrowers does not exhibit such differences. A tightening in lending standards or reserve requirements at home does not have differential effects on both interbank and non-bank lending in the UK.

show abstract

Cross-border banking, credit access, and the financial crisis

Cited by 397 publications

References 68 publications

Islamic banking development and access to credit

Islamic banking development and access to credit

Small Firms, Corruption, and Demand for Credit. Evidence from the Euro Area

On a Tight Leash: Does Bank Organisational Structure Matter for Macroprudential Spillovers?

Contact Info

Product

Resources

About