Lending Behavior of Multinational Bank Affiliates

0354315 - ÚTIA 2011 RIV UA eng J - Článek v odborném periodiku
Derviz, Alexis - Podpiera, J.
Lending Behavior of Multinational Bank Affiliates.
Risk Governance and Control: Financial Markets & Institutions. Roč. 1, č. 1 (2011), s. 19-36. ISSN 2077-429X
Výzkumný záměr: CEZ:AV0Z10750506
Klíčová slova: Multinational bank * Contagion * Substitution * Agency
Kód oboru RIV: AH - Ekonomie
http://library.utia.cas.cz/separaty/2011/E/derviz-lending behavior of multinational bank affiliates.pdf

We study the parent influence on lending by affiliates of a multinational bank. In the proposed theoretical model, local lending is influenced by shareholder-affiliate manager delegation and precautionary motives. The outcome is either contagion (the loan volume in the affiliate follows the direction of the parent bank country shock) or performance-based reallocation of funds (substitution), depending on the degree of manager delegation in the affiliate and the liquidity-sensitivity in the parent bank. Empirical investigation, deliberately conducted on a sample not covering the latest financial crisis, shows that also in “normal” times, multinational banks that are likely to delegate lending decisions or be more liquidity-sensitive are more inclined towards contagionist behavior.
Trvalý link: http://hdl.handle.net/11104/0193349