Arbeitspapier
Multinational lending retrenchment after the global financial crisis: The impact of policy interventions
Did policy interventions contribute to the gradual segmentation of lending markets starting with the 2007 - 2008 global financial crisis? We investigate this question in an international Cournot duopoly model under an equity constraint. Two symmetric multinational banks compete for corporate lending via local affiliates in two separate national lending markets. Their credit risk in each market is determined by their choice of monitoring effort, which is more costly for foreign lending. Under a binding equity constraint, our model predicts shocks to bank equity, regulatory standards and monetary policy, such as occurred during and after the crisis, to increase the home bias of multinational lending. We interpret this lending retrenchment as a flight to informationally closer or better understood lending. Our results under a non-binding equity constraint are largely identical.
- Language
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Englisch
- Bibliographic citation
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Series: Munich Discussion Paper ; No. 2020-2
- Classification
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Wirtschaft
Multinational Firms; International Business
Financial Aspects of Economic Integration
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
- Subject
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financial integration
banking regulation
multinational banking
- Event
-
Geistige Schöpfung
- (who)
-
Müting, Miriam
- Event
-
Veröffentlichung
- (who)
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Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
- (where)
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München
- (when)
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2020
- DOI
-
doi:10.5282/ubm/epub.72612
- Handle
- URN
-
urn:nbn:de:bvb:19-epub-72612-4
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Müting, Miriam
- Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
Time of origin
- 2020
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