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What Determines Maturity? An analysis of German Commercial Banks' foreign Assets

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  • C. M. Buch

Abstract

Surges and reversals of short-term foreign liabilities are often held responsible for instabilities in international financial markets. Yet, empirical evidence on the factors determining the maturity of capital flows is scant. This article analyses the determinants of foreign assets of German banks for a panel of up to 73 countries for the years 1985-1997. Cross section estimates show that short- and long-term assets are highly correlated with foreign trade links, which are more important in explaining claims on banks versus claims on non-banks. The presence of financial centres likewise has a positive impact throughout. Evidence on the importance of exchange rate volatility is more mixed.

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  • C. M. Buch, 2003. "What Determines Maturity? An analysis of German Commercial Banks' foreign Assets," Applied Financial Economics, Taylor & Francis Journals, vol. 13(5), pages 337-351.
    • Handle: RePEc:taf:apfiec:v:13:y:2003:i:5:p:337-351
    DOI: 10.1080/13504850210128857
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    References listed on IDEAS

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    1. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2001. "The external wealth of nations: measures of foreign assets and liabilities for industrial and developing countries," Journal of International Economics, Elsevier, vol. 55(2), pages 263-294, December.
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    Cited by:

    1. Valev, Neven T., 2006. "Institutional uncertainty and the maturity of international loans," Journal of International Money and Finance, Elsevier, vol. 25(5), pages 780-794, August.
    2. Samira Hellou, 2018. "Term structure of bank flows to emerging countries: what effects of short- vs. long-term regulatory arbitrage are?," Working Papers hal-04141704, HAL.
    3. Valev, Neven T., 2007. "Uncertainty and international debt maturity," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 17(4), pages 372-386, October.

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