Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192897 
more recent Version: 
Year of Publication: 
2018
Series/Report no.: 
Working Paper No. 288
Publisher: 
University of Zurich, Department of Economics, Zurich
Abstract: 
We classify a large sample of banks according to the geographic diversification of their international syndicated loan portfolio. Our results show that diversified banks maintain higher loan supply during banking crises in borrower countries. The positive loan supply effects lead to higher investment and employment growth for firms. Diversified banks are stabilizing due to their ability to raise additional funding during times of distress, which also shields connected markets from spillovers. Further distinguishing banks by nationality reveals a pecking order: diversified domestic banks are the most stable source of funding, while foreign banks with little diversification are the most fickle. Our findings suggest that the decline in financial integration since the recent crisis increases countries' vulnerability to local shocks.
Subjects: 
Diversification
Global Banking
Financial Stability
Syndicated Loan Market
Banking Crisis
JEL: 
F21
F36
G21
G30
O16
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.