International Shock Transmission after the Lehman Brothers Collapse: Evidence from Syndicated Lending
De Haas, Ralph, and
Neeltje Van Horen. 2012. "International Shock Transmission after the Lehman Brothers Collapse: Evidence from Syndicated Lending."
American Economic Review,
After Lehman Brothers filed for bankruptcy in September 2008, cross-border bank lending contracted sharply. To explain the severity and variation in this contraction, we analyze detailed data on cross-border syndicated lending by 75 banks to 59 countries. We find that banks which had to write down sub-prime assets, refinance large amounts of long-term debt, and which experienced sharp declines in their market-to-book ratio, transmitted these shocks across borders by curtailing their lending abroad. While shocked banks differentiated between countries in much the same way as less constrained banks, they restricted their lending more to small borrowers.
Article Full-Text Access
De Haas, Ralph (European Bank for Reconstruction and Development)
Van Horen, Neeltje (De Nederlandsche Bank)
G21: Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
E44: Financial Markets and the Macroeconomy
F44: International Business Cycles
G01: Financial Crises