Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264791 
Authors: 
Year of Publication: 
2015
Series/Report no.: 
Working Paper No. 199
Publisher: 
Oesterreichische Nationalbank (OeNB), Vienna
Abstract: 
This study provides findings on the transmission of liquidity shocks by Austrian parent banks through the lending channel. I investigate how different types of parent banks adjust their balance sheet positions in response to a liquidity shock and how such an adjustment is transmitted into destination countries. I distinguish between three definitions of crossborder lending activities. In the most general definition I analyze changes in total lending, which consists of the two components - lending to banks and lending to non-banks. In a second step I concentrate on a narrower definition of lending, that is lending to nonaffiliated banks. Finally I focus on an even more targeted definition, such as lending to affiliated banks (lending to branches and subsidiaries). I find that (1) smaller banks (parent banks without affiliates) did not adjust their balance sheet composition in a very pronounced manner in response to a liquidity shock. (2) Large banks (parent banks with affiliates) did decrease moderately their cross-border loan share to other, non-affiliated banks. (3) Internal capital markets are important for the funding structure of Austrian parent banks and their foreign affiliates. (4) Destination countries matter. Countries signing the Vienna Initiative do receive strong support through the internal capital market.
Subjects: 
cross-border lending
liquidity risk
shock transmission
internal capital markets
Vienna Initiative
JEL: 
E44
F30
G18
G21
G32
Document Type: 
Working Paper

Files in This Item:
File
Size





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