Adams-Kane, JonathonCaballero, Julian A.Lim, Jamus Jerome2013-10-022013-10-022013-09https://hdl.handle.net/10986/16041One of the persistent policy problems faced by governments contemplating financial liberalizations is the question of whether to allow foreign banks entry into the domestic economy. This question has become ever more urgent in recent times, due to rapid financial globalization, coupled with the credit contractions experienced as a result of the 2007/08 financial crisis. This paper examines the question of whether opening the financial sector to foreign participation is a good idea for developing countries, using a unique bank-level database of foreign ownership. In particular, the authors examine whether the credit supply of majority foreign-owned financial institutions differ systematically conditional on a crisis event in their home economies. They show that foreign banks that were exposed to crises in their home countries exhibit changes in lending patterns that are lower by between 13 and 42 percent than their non-crisis counterparts.en-USCC BY 3.0 IGOACCESS TO CREDITACCOUNTINGASSET PORTFOLIOSASSETSASSETS RATIOASYMMETRIC INFORMATIONAUTONOMYBALANCE SHEETBANK BALANCE SHEETSBANK BEHAVIORBANK CLOSURESBANK CREDITBANK FAILURESBANK HOLDINGBANK HOLDING COMPANIESBANK LENDINGBANK LIQUIDATIONSBANK LIQUIDITYBANK NATIONALIZATIONSBANK ORIGINBANK RESTRUCTURINGBANK RUNSBANKING CRISESBANKING CRISISBANKING REGULATIONBANKING SECTORBANKING SYSTEMBANKING SYSTEMSBANKRUPTBUSINESS CYCLEBUSINESS CYCLESCAPITAL FLOWSCAPITAL MARKETCAPITAL MARKETSCAPITAL STRUCTURECENTRAL BANKCHECKSCLAIMCOLLATERALCOLLECTION EFFORTCOLLECTION PROCESSCOMMERCIAL BANKSCOOPERATIVE BANKSCREDIT ACCESSCREDIT ALLOCATIONCREDIT PROVISIONCRISIS COUNTRIESCRISIS COUNTRYCRISIS LENDINGCROSS-BORDER BANKINGCURRENT ACCOUNTCURRENT ACCOUNT BALANCEDEPENDENTDEPOSITDEPOSITSDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT BANKDIRECT OWNERSHIPDOMESTIC BANKDOMESTIC BANKINGDOMESTIC BANKSDOMESTIC CURRENCYDOMESTIC FINANCIAL MARKETSDOMESTIC LIQUIDITYECONOMETRICSECONOMIC CRISESECONOMIC POLICYEMERGING ECONOMIESEMERGING MARKETEMERGING MARKETSEMPIRICAL ANALYSISEXCHANGE RATESEXCLUSIONEXPENDITUREEXPORTERSFINANCIAL CONTAGIONFINANCIAL CRISESFINANCIAL CRISISFINANCIAL DEVELOPMENTFINANCIAL DISTRESSFINANCIAL GLOBALIZATIONFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INTEGRATIONFINANCIAL INTERMEDIATIONFINANCIAL LIBERALIZATIONSFINANCIAL MARKETSFINANCIAL SERVICESFINANCIAL SHOCKSFINANCIAL STABILITYFINANCIAL STUDIESFINANCIAL SUPPORTFINANCIAL SYSTEMFINANCIERSFINANCING NEEDSFISCAL POLICYFISCAL RESTRUCTURINGFOREIGN BANKFOREIGN BANK ENTRYFOREIGN BANK PARTICIPATIONFOREIGN BANK PENETRATIONFOREIGN BANKSFOREIGN ENTRYFOREIGN LIABILITIESFOREIGN OWNERSHIPGLOBALIZATIONHOLDING COMPANYHOST COUNTRIESHOST COUNTRYHOST ECONOMIESHOST ECONOMYINDIVIDUAL BANKSINFLATIONINTEREST MARGININTERNATIONAL BANKINTERNATIONAL BANK LENDINGINTERNATIONAL BANKINGINTERNATIONAL CREDITINTERNATIONAL ECONOMICSINTERNATIONAL SETTLEMENTSJUDGMENTLARGE BANKLENDERSLENDING DECISIONSLIQUIDATIONSLIQUIDITY MANAGEMENTLIQUIDITY PROBLEMSLIQUIDITY SUPPORTLOANLOAN DEMANDLOAN LOSSLOAN LOSS PROVISIONSLOAN MARKETLOAN PORTFOLIOLOAN RATIOMACRO FACTORSMANDATEMONETARY AUTHORITIESMONETARY FUNDMONETARY SHOCKSMULTINATIONALMULTINATIONAL BANKMULTINATIONAL BANKSMULTINATIONALSNONPERFORMING LOANSNUMBER OF BANKSOFFSHORE FINANCIAL CENTEROUTSTANDING LOANSOWNERSHIP STRUCTUREPARENT COMPANIESPARENT COMPANYPORTFOLIOPOST-CRISIS PERIODPOST-CRISIS PERIODSPROFITABILITYRATES OF INFLATIONRECESSIONREGULATORY POLICYREPATRIATIONRESERVESRETURNSHAREHOLDERSMALL BUSINESSESSOLVENCYSTATE BANKSSTOCK MARKETSUBSIDIARIESSUBSIDIARYSYSTEMIC BANKING CRISESSYSTEMIC BANKING CRISISSYSTEMIC CRISESTAXTAX REGIMETRADE FLOWSTRANSACTIONWHOLESALE FUNDINGWorld Bank10.1596/1813-9450-6590