The common methodology better explains cross-sectional differences in lending by internationally active banks than lending by purely domestic banks.<\/p>\n
The channels of transmission of liquidity shocks to bank lending differ across banks. Deposit funding matters more for the domestically oriented banks. In contrast, internal liquidity management strategies and official liquidity support matter more for the banks with foreign affiliates.<\/p>\n
The common empirical model explains more of the cross-sectional and time-series variation in domestic lending than in net-due-to (such as intrabank lending) or foreign lending. This finding suggests higher stability of domestic lending. At the same time, we see cross-border lending growth is more sensitive to liquidity risk in relation to the balance sheet characteristics of the banks. An interpretation is that cross-border lending tends to be subordinated to domestic lending activity as stress conditions change.\u00a0 Liquidity Risk<\/strong><\/a><\/p>\n \u00a0 The common methodology better explains cross-sectional differences in lending by internationally active banks than lending by purely domestic banks. The channels of transmission of liquidity shocks to bank lending differ across banks. Deposit funding matters more for the domestically oriented … Continue reading ![\"Cross](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/10\/Cross-Country-Liquidity-Risk-300x271.jpg\")
<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"