Show simple item record

dc.contributor.authorAlbertazzi, Ugo
dc.contributor.authorCimadomo, Jacopo
dc.contributor.authorMaffei-Faccioli, Nicolò
dc.description.abstractThis paper explores whether foreign banks stabilise or destabilise lending to the real economy in the presence of sovereign stress in the domestic economy and abroad. In this context, the presence of foreign intermediaries poses a fundamental, yet unexplored, trade-off. On the one hand, domestic sovereign shocks are broadly inconsequential for the lending capacity of foreign banks, given that their funding conditions are not hampered by such shocks. On the other, these intermediaries may react more harshly than domestic banks to a deterioration in local loan risk and demand conditions, or import shocks from their own sovereign. We exploit granular and confidential data on euro area banks operating in different countries to assess this trade-off. Overall, it is found that, under certain conditions, the presence of foreign lenders stabilises lending, thus mitigating the doom loop.en_US
dc.publisherNorges Banken_US
dc.relation.ispartofseriesWorking paper;2/2022
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 Internasjonal*
dc.subjectJEL: E5en_US
dc.subjectJEL: G21en_US
dc.subjectsovereign stressen_US
dc.subjectinternational banksen_US
dc.subjectlending activityen_US
dc.titleForeign banks and the doom loopen_US
dc.typeWorking paperen_US
dc.subject.nsiVDP::Samfunnsvitenskap: 200::Økonomi: 210::Samfunnsøkonomi: 212en_US

Files in this item


This item appears in the following Collection(s)

Show simple item record

Attribution-NonCommercial-NoDerivatives 4.0 Internasjonal
Except where otherwise noted, this item's license is described as Attribution-NonCommercial-NoDerivatives 4.0 Internasjonal