Arbeitspapier
Multinational banks' deleveraging in the crisis driven by pre-crisis characteristics and behavior
After the collapse of Lehman Brothers, a rapid and far-reaching shrinkage of international banks' assets with a focus on foreign claims took place. For the largest 67 German banking groups, we find that both their characteristics and behavior in the pre-crisis episode had repercussions for the crisis period. Above all, prior non-traditional banking activities - proxied by the relevance of securities and noninterest income - resulted in balance sheet contraction in the crisis. While, from 2002 to mid-2008, a disproportionately high growth rate in profits to assets is found to be indicative of too much risk taking, both high average income and a strong balance sheet expansion in the pre-crisis period are found to be positive per se. In contrast, a high average income or a strong growth in assets in just the last three and a half years before the outbreak of the crisis put balance sheets during the crisis under adjustment pressure. During the crisis, short-term wholesale funding proved to be a disadvantage, while good capital endowment (core Tier 1 capital to RWA ratio), deposit funding and strong affiliate presence abroad had a stabilizing impact. Most of these variables lose their significance in normal times.
- ISBN
-
978-3-95729-162-2
- Sprache
-
Englisch
- Erschienen in
-
Series: Bundesbank Discussion Paper ; No. 18/2015
- Klassifikation
-
Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Multinational Firms; International Business
International Lending and Debt Problems
- Thema
-
banks
deleveraging
foreign assets
financial crisis
pre crisis
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Frey, Rainer
- Ereignis
-
Veröffentlichung
- (wer)
-
Deutsche Bundesbank
- (wo)
-
Frankfurt a. M.
- (wann)
-
2015
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Frey, Rainer
- Deutsche Bundesbank
Entstanden
- 2015
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