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Cross-border banking claims on emerging countries: The Basel III Banking Reforms in a push and pull framework

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  • Figuet, Jean-Marc
  • Humblot, Thomas
  • Lahet, Delphine

Abstract

This paper outlines a framework for mapping the effects of Basel III increases in capital and liquidity requirements on cross-border bank lending to emerging market economies. In a traditional push and pull scheme, the effects of capital and liquidity ratios are disentangled through 6 specific push factors. Performing a GMM over the 1999–2010 period, we provide an assessment of the potential impact of each new regulatory standard on claims held by international banks from 16 advanced economies on 30 emerging countries. We provide evidence that the new regulation could result in an overall decrease of 20% in cross-border claim inflows.

Suggested Citation

  • Figuet, Jean-Marc & Humblot, Thomas & Lahet, Delphine, 2015. "Cross-border banking claims on emerging countries: The Basel III Banking Reforms in a push and pull framework," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 34(C), pages 294-310.
    • Handle: RePEc:eee:intfin:v:34:y:2015:i:c:p:294-310
    DOI: 10.1016/j.intfin.2014.11.016
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    2. Mutarindwa, Samuel & Schäfer, Dorothea & Stephan, Andreas, 2020. "The impact of liquidity and capital requirements on lending and stability of African banks," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 67(C).
    3. Amidu, Mohammed & Mohammed Sissy, Aisha & Haruna, Issahaku, 2017. "The effects of cross-border banking and institutional quality on accounting information of banks in Africa," MPRA Paper 101509, University Library of Munich, Germany, revised 15 Sep 2017.
    4. Judit Temesvary, 2018. "The Role Of Regulatory Arbitrage In U.S. Banks' International Flows: Bank‐Level Evidence," Economic Inquiry, Western Economic Association International, vol. 56(4), pages 2077-2098, October.

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    More about this item

    Keywords

    Basel III; Cross-border bank lending; Capital flows; Emerging market economies; Push and pull factors;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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