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Foreign Banks and the Vienna Initiative: Turning Sinners Into Saints?
Author: Mr. Ralph De Haas, Ms. Yevgeniya Korniyenko, Mr. Alexander Pivovarsky, and Ms. Elena Loukoianova
Series:
IMF Working Papers
Volume/Issue:
Volume 2012: Issue 117
Language:
English
Publication Date:
01 May 2012
DOI:
https://doi.org/10.5089/9781475503463.001
ISBN:
9781475503463
ISSN:
1018-5941
Pages:
41
Keywords:
WP; parent bank; bank subsidiary; government support; credit growth; bank lending; Foreign Banks; Vienna Initiative; Financial Crisis; State Support; VI bank; roll-over commitment; loan-to-deposit ratio; Credit; Bank credit; Loans; Central and Eastern Europe; Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We use data on 1,294 banks in Central and Eastern Europe to analyze how bank ownership and creditor coordination in the form of the Vienna Initiative affected credit growth during the 2008–09 crisis. As part of the Vienna Initiative western European banks signed country-specific commitment letters in which they pledged to maintain exposures and to support their subsidiaries in Central and Eastern Europe. We show that both domestic and foreign banks sharply curtailed credit during the crisis, but that foreign banks that participated in the Vienna Initiative were relatively stable lenders. We find no evidence of negative spillovers from countries where banks signed commitment letters to countries where they did not.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund