Credit to Private Sector, Interest Spread and Volatility in Credit Flows / Hamid Rashid.

Format:

Book

Government document

Author/Creator:

Ḥamīd, Rāshid, author.

Series:

UN Department of Economic and Social Affairs (DESA) Working Papers, 2520-6656 ; no.105.

UN Department of Economic and Social Affairs (DESA) Working Papers, 2520-6656 ; no.105

Language:

English

Subjects (All):

Economic and Social Development.

Local Subjects:

Economic and Social Development.

Physical Description:

1 online resource.

Place of Publication:

New York : United Nations, 2011.

System Details:

text file

Summary:

With bank-level data from 81 developing countries, the paper shows that increased foreign bank presence is associated with increased reliance on non-deposit based funding, which leads to higher interest rate spreads, less credit to the private sector, and higher volatility in bank loans. Foreign bank entry significantly reduces domestic banks' share of deposits while foreign banks typically allocate less of their assets and deposits to lending. As domestic banks lose their deposit base, they rely on non-deposit based funding, but its higher costs and uncertainty force domestic banks to reduce their lending activities.

Access Restriction:

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