Learning from Financial Crises
This paper considers the question of whether international banks learn from their previous crisis experiences and reduce their lending to developing countries in the event of a financial crisis. The analysis combines a bank-level dataset of bank ac...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/04/19365015/learning-financial-crises http://hdl.handle.net/10986/18332 |
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okr-10986-18332 |
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| recordtype |
oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO CREDIT ACCESS TO FINANCE ADVANCED ECONOMIES AMOUNT OF LOANS ASSET BASE ASSET RATIO ASSET RATIOS ASSET VALUES ASSETS RATIO BAILOUT BALANCE SHEET BALANCE SHEETS BANK ACTIVITY BANK ASSETS BANK BALANCE SHEETS BANK CREDIT BANK DEPOSITS BANK HOLDING BANK HOLDING COMPANIES BANK HOLDING COMPANY BANK LOAN BANK LOANS BANK PERFORMANCE BANK PROFITABILITY BANK RESTRUCTURING BANKING CRISES BANKING CRISIS BANKING INSTITUTION BANKING INSTITUTIONS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SECTOR REFORM BANKING SECTORS BANKING SUPERVISION BANKING SYSTEM BIASES BUSINESS CYCLE CAPITAL MARKETS CAPITAL REQUIREMENTS CHECKS CLAIM COLLATERAL CONTAGION COOPERATIVE BANKS COST OF CREDIT CREDIBILITY CREDIT EXTENSION CREDIT LINES CREDIT POLICIES CREDIT PROVISION CREDIT QUALITY CREDIT RISK CREDITORS CREDITS CRISIS LENDING CURRENCY CURRENCY CRISES CURRENT ACCOUNT CURRENT ACCOUNT BALANCE DEBT DEBT CRISES DEBT CRISIS DEBT DEFAULT DEBT OBLIGATIONS DEFAULT PROBABILITIES DEFAULT RISK DEPENDENT DEPOSIT DEPOSITS DEVELOPING COUNTRIES DIRECT OWNERSHIP DOMESTIC BANKING DOMESTIC BANKS DOMESTIC CREDITORS DOMESTIC DEBT DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CONDITIONS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EMPIRICAL ANALYSIS EQUITIES EUROPEAN CENTRAL BANK EXCLUSION EXTERNAL DEBT FAMILIES FEDERAL RESERVE FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL DISRUPTION FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL REFORM FINANCIAL REFORMS FINANCIAL SECTOR POLICY FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SUPPORT FOREIGN BANK FOREIGN BANKS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN OWNERSHIP GUIDELINES HOME BANKING HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST ECONOMY HOUSEHOLDS ID IMPORTANCE OF LIQUIDITY INCOME STATEMENT INCUMBENT BANKS INFLATION INFORMATION ASYMMETRY INFORMATION SYSTEMS INFORMATIONAL ASYMMETRIES INFORMATIONAL ASYMMETRY INSTITUTIONAL REFORM INSTRUMENT INSURANCE INTEREST MARGIN INTERNATIONAL BANK INTERNATIONAL BANK LENDING INTERNATIONAL BANKS INTERNATIONAL FINANCE ISSUANCE JUDGMENT JURISDICTION LEARNING OPPORTUNITIES LENDING CONDITIONS LENDING DECISIONS LIQUIDITY CONSTRAINT LOAN LOAN LOSS LOAN LOSS PROVISIONS LOAN OFFICER LOAN PORTFOLIO LOAN PORTFOLIOS LOAN VOLUMES LOCAL CURRENCY LOCAL MARKETS MACROECONOMIC CONTROLS MACROECONOMIC ENVIRONMENT MACROECONOMIC ENVIRONMENTS MACROECONOMIC POLICY MACROECONOMIC VARIABLE MACROECONOMICS MARKET SHARE MONETARY AUTHORITIES MONETARY POLICY MONETARY SHOCKS NET ASSETS NET INTEREST MARGIN NET WORTH NONPERFORMING LOANS OPEN ECONOMIES OPERATING COSTS OUTSTANDING LOAN OVERHEAD COSTS OWNERSHIP DATA OWNERSHIP INFORMATION PARENT COMPANIES POTENTIAL BORROWERS PRIMARY MARKETS PRIVATE CREDIT PROFITABILITY PROFITABILITY MEASURES PRUDENTIAL REGULATION RECESSIONS REFORM MEASURE REPATRIATION REPUDIATION RESERVES RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RISK EXPOSURE RISK MANAGEMENT RISK OF DEFAULT SECURITIES SHARE OF ASSETS SOLVENCY SOVEREIGN DEBT STOCK MARKET SUBSIDIARIES TAX TRADE FLOWS TRANSMISSION MECHANISM VALUATION VALUATIONS WHOLESALE FUNDING |
| spellingShingle |
ACCESS TO CREDIT ACCESS TO FINANCE ADVANCED ECONOMIES AMOUNT OF LOANS ASSET BASE ASSET RATIO ASSET RATIOS ASSET VALUES ASSETS RATIO BAILOUT BALANCE SHEET BALANCE SHEETS BANK ACTIVITY BANK ASSETS BANK BALANCE SHEETS BANK CREDIT BANK DEPOSITS BANK HOLDING BANK HOLDING COMPANIES BANK HOLDING COMPANY BANK LOAN BANK LOANS BANK PERFORMANCE BANK PROFITABILITY BANK RESTRUCTURING BANKING CRISES BANKING CRISIS BANKING INSTITUTION BANKING INSTITUTIONS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SECTOR REFORM BANKING SECTORS BANKING SUPERVISION BANKING SYSTEM BIASES BUSINESS CYCLE CAPITAL MARKETS CAPITAL REQUIREMENTS CHECKS CLAIM COLLATERAL CONTAGION COOPERATIVE BANKS COST OF CREDIT CREDIBILITY CREDIT EXTENSION CREDIT LINES CREDIT POLICIES CREDIT PROVISION CREDIT QUALITY CREDIT RISK CREDITORS CREDITS CRISIS LENDING CURRENCY CURRENCY CRISES CURRENT ACCOUNT CURRENT ACCOUNT BALANCE DEBT DEBT CRISES DEBT CRISIS DEBT DEFAULT DEBT OBLIGATIONS DEFAULT PROBABILITIES DEFAULT RISK DEPENDENT DEPOSIT DEPOSITS DEVELOPING COUNTRIES DIRECT OWNERSHIP DOMESTIC BANKING DOMESTIC BANKS DOMESTIC CREDITORS DOMESTIC DEBT DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CONDITIONS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EMPIRICAL ANALYSIS EQUITIES EUROPEAN CENTRAL BANK EXCLUSION EXTERNAL DEBT FAMILIES FEDERAL RESERVE FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL DISRUPTION FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL REFORM FINANCIAL REFORMS FINANCIAL SECTOR POLICY FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SUPPORT FOREIGN BANK FOREIGN BANKS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN OWNERSHIP GUIDELINES HOME BANKING HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST ECONOMY HOUSEHOLDS ID IMPORTANCE OF LIQUIDITY INCOME STATEMENT INCUMBENT BANKS INFLATION INFORMATION ASYMMETRY INFORMATION SYSTEMS INFORMATIONAL ASYMMETRIES INFORMATIONAL ASYMMETRY INSTITUTIONAL REFORM INSTRUMENT INSURANCE INTEREST MARGIN INTERNATIONAL BANK INTERNATIONAL BANK LENDING INTERNATIONAL BANKS INTERNATIONAL FINANCE ISSUANCE JUDGMENT JURISDICTION LEARNING OPPORTUNITIES LENDING CONDITIONS LENDING DECISIONS LIQUIDITY CONSTRAINT LOAN LOAN LOSS LOAN LOSS PROVISIONS LOAN OFFICER LOAN PORTFOLIO LOAN PORTFOLIOS LOAN VOLUMES LOCAL CURRENCY LOCAL MARKETS MACROECONOMIC CONTROLS MACROECONOMIC ENVIRONMENT MACROECONOMIC ENVIRONMENTS MACROECONOMIC POLICY MACROECONOMIC VARIABLE MACROECONOMICS MARKET SHARE MONETARY AUTHORITIES MONETARY POLICY MONETARY SHOCKS NET ASSETS NET INTEREST MARGIN NET WORTH NONPERFORMING LOANS OPEN ECONOMIES OPERATING COSTS OUTSTANDING LOAN OVERHEAD COSTS OWNERSHIP DATA OWNERSHIP INFORMATION PARENT COMPANIES POTENTIAL BORROWERS PRIMARY MARKETS PRIVATE CREDIT PROFITABILITY PROFITABILITY MEASURES PRUDENTIAL REGULATION RECESSIONS REFORM MEASURE REPATRIATION REPUDIATION RESERVES RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RISK EXPOSURE RISK MANAGEMENT RISK OF DEFAULT SECURITIES SHARE OF ASSETS SOLVENCY SOVEREIGN DEBT STOCK MARKET SUBSIDIARIES TAX TRADE FLOWS TRANSMISSION MECHANISM VALUATION VALUATIONS WHOLESALE FUNDING Lim, Jamus Jerome Minne, Geoffrey Learning from Financial Crises |
| relation |
Policy Research Working Paper;No. 6838 |
| description |
This paper considers the question of
whether international banks learn from their previous crisis
experiences and reduce their lending to developing countries
in the event of a financial crisis. The analysis combines a
bank-level dataset of bank activity and ownership with
country-level data on the stock of historical crisis events
between 1800 and 2005. To circumvent selection and
endogeneity concerns, the paper exploits temporal variations
in the relative recency of crises as instruments for crisis
experience. The results indicate that foreign banks with
greater crisis experience reduced their lending
significantly more relative to other foreign banks, which
can be interpreted as evidence in favor of a learning
effect. The findings survive robustness checks that include
alternative measures of crisis experience, additional
controls, and decompositions into different types of crises.
The question of learning is also examined from the
perspective of other measures of bank performance. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Lim, Jamus Jerome Minne, Geoffrey |
| author_facet |
Lim, Jamus Jerome Minne, Geoffrey |
| author_sort |
Lim, Jamus Jerome |
| title |
Learning from Financial Crises |
| title_short |
Learning from Financial Crises |
| title_full |
Learning from Financial Crises |
| title_fullStr |
Learning from Financial Crises |
| title_full_unstemmed |
Learning from Financial Crises |
| title_sort |
learning from financial crises |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/04/19365015/learning-financial-crises http://hdl.handle.net/10986/18332 |
| _version_ |
1764440650296590336 |
| spelling |
okr-10986-183322021-04-23T14:03:44Z Learning from Financial Crises Lim, Jamus Jerome Minne, Geoffrey ACCESS TO CREDIT ACCESS TO FINANCE ADVANCED ECONOMIES AMOUNT OF LOANS ASSET BASE ASSET RATIO ASSET RATIOS ASSET VALUES ASSETS RATIO BAILOUT BALANCE SHEET BALANCE SHEETS BANK ACTIVITY BANK ASSETS BANK BALANCE SHEETS BANK CREDIT BANK DEPOSITS BANK HOLDING BANK HOLDING COMPANIES BANK HOLDING COMPANY BANK LOAN BANK LOANS BANK PERFORMANCE BANK PROFITABILITY BANK RESTRUCTURING BANKING CRISES BANKING CRISIS BANKING INSTITUTION BANKING INSTITUTIONS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SECTOR REFORM BANKING SECTORS BANKING SUPERVISION BANKING SYSTEM BIASES BUSINESS CYCLE CAPITAL MARKETS CAPITAL REQUIREMENTS CHECKS CLAIM COLLATERAL CONTAGION COOPERATIVE BANKS COST OF CREDIT CREDIBILITY CREDIT EXTENSION CREDIT LINES CREDIT POLICIES CREDIT PROVISION CREDIT QUALITY CREDIT RISK CREDITORS CREDITS CRISIS LENDING CURRENCY CURRENCY CRISES CURRENT ACCOUNT CURRENT ACCOUNT BALANCE DEBT DEBT CRISES DEBT CRISIS DEBT DEFAULT DEBT OBLIGATIONS DEFAULT PROBABILITIES DEFAULT RISK DEPENDENT DEPOSIT DEPOSITS DEVELOPING COUNTRIES DIRECT OWNERSHIP DOMESTIC BANKING DOMESTIC BANKS DOMESTIC CREDITORS DOMESTIC DEBT DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CONDITIONS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EMPIRICAL ANALYSIS EQUITIES EUROPEAN CENTRAL BANK EXCLUSION EXTERNAL DEBT FAMILIES FEDERAL RESERVE FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL DISRUPTION FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL REFORM FINANCIAL REFORMS FINANCIAL SECTOR POLICY FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SUPPORT FOREIGN BANK FOREIGN BANKS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN OWNERSHIP GUIDELINES HOME BANKING HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST ECONOMY HOUSEHOLDS ID IMPORTANCE OF LIQUIDITY INCOME STATEMENT INCUMBENT BANKS INFLATION INFORMATION ASYMMETRY INFORMATION SYSTEMS INFORMATIONAL ASYMMETRIES INFORMATIONAL ASYMMETRY INSTITUTIONAL REFORM INSTRUMENT INSURANCE INTEREST MARGIN INTERNATIONAL BANK INTERNATIONAL BANK LENDING INTERNATIONAL BANKS INTERNATIONAL FINANCE ISSUANCE JUDGMENT JURISDICTION LEARNING OPPORTUNITIES LENDING CONDITIONS LENDING DECISIONS LIQUIDITY CONSTRAINT LOAN LOAN LOSS LOAN LOSS PROVISIONS LOAN OFFICER LOAN PORTFOLIO LOAN PORTFOLIOS LOAN VOLUMES LOCAL CURRENCY LOCAL MARKETS MACROECONOMIC CONTROLS MACROECONOMIC ENVIRONMENT MACROECONOMIC ENVIRONMENTS MACROECONOMIC POLICY MACROECONOMIC VARIABLE MACROECONOMICS MARKET SHARE MONETARY AUTHORITIES MONETARY POLICY MONETARY SHOCKS NET ASSETS NET INTEREST MARGIN NET WORTH NONPERFORMING LOANS OPEN ECONOMIES OPERATING COSTS OUTSTANDING LOAN OVERHEAD COSTS OWNERSHIP DATA OWNERSHIP INFORMATION PARENT COMPANIES POTENTIAL BORROWERS PRIMARY MARKETS PRIVATE CREDIT PROFITABILITY PROFITABILITY MEASURES PRUDENTIAL REGULATION RECESSIONS REFORM MEASURE REPATRIATION REPUDIATION RESERVES RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RISK EXPOSURE RISK MANAGEMENT RISK OF DEFAULT SECURITIES SHARE OF ASSETS SOLVENCY SOVEREIGN DEBT STOCK MARKET SUBSIDIARIES TAX TRADE FLOWS TRANSMISSION MECHANISM VALUATION VALUATIONS WHOLESALE FUNDING This paper considers the question of whether international banks learn from their previous crisis experiences and reduce their lending to developing countries in the event of a financial crisis. The analysis combines a bank-level dataset of bank activity and ownership with country-level data on the stock of historical crisis events between 1800 and 2005. To circumvent selection and endogeneity concerns, the paper exploits temporal variations in the relative recency of crises as instruments for crisis experience. The results indicate that foreign banks with greater crisis experience reduced their lending significantly more relative to other foreign banks, which can be interpreted as evidence in favor of a learning effect. The findings survive robustness checks that include alternative measures of crisis experience, additional controls, and decompositions into different types of crises. The question of learning is also examined from the perspective of other measures of bank performance. 2014-05-14T22:08:09Z 2014-05-14T22:08:09Z 2014-04 http://documents.worldbank.org/curated/en/2014/04/19365015/learning-financial-crises http://hdl.handle.net/10986/18332 English en_US Policy Research Working Paper;No. 6838 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |