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Banking Flows And Financial Crisis Financial Interconnectedness And Basel Iii Effects

Author

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  • Swati R. Ghosh

    (The World Bank, 1818 H Street NW, Washington DC 20433, USA)

  • Naotaka Sugawara

    (The World Bank, 1818 H Street NW, Washington DC 20433, USA)

  • Juan Zalduendo

    (The World Bank, 1818 H Street NW, Washington DC 20433, USA)

Abstract

This paper examines the factors that determine banking flows from advanced economies to emerging markets. In addition to the usual determinants of capital flows in terms of global push and local pull factors, we examine the role of bilateral factors, such as growth differentials and economic size, as well as contagion factors and measures of the depth in financial interconnectedness between lenders and borrowers. We find profound differences across regions. In particular, in spite of the severe impact of the global financial crisis, emerging Europe stands out as a more stable region. Assuming that the determinants of banking flows remain unchanged in the presence of structural changes, we use these results to explore the short-term implications of Basel III capital regulations on banking flows to emerging markets.

Suggested Citation

  • Swati R. Ghosh & Naotaka Sugawara & Juan Zalduendo, 2012. "Banking Flows And Financial Crisis Financial Interconnectedness And Basel Iii Effects," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-32.
    • Handle: RePEc:wsi:jicepx:v:03:y:2012:i:01:n:s1793993312400017
    DOI: 10.1142/S1793993312400017
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    Cited by:

    1. Mr. Atish R. Ghosh & Mahvash S Qureshi & Naotaka Sugawara, 2014. "Regulating Capital Flows at Both Ends: Does it Work?," IMF Working Papers 2014/188, International Monetary Fund.

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    More about this item

    Keywords

    Basel III; capital flows; cross-border banking flows; financial crises; financial linkages; emerging markets; F30; F34; G01; G15; G21;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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