TY  - UNPD
A1  - Gropp, Reint
A1  - Radev, Deyan
T1  - International banking conglomerates and the transmission of lending shocks across borders
T2  - SAFE working paper series ; No. 175
N2  - We investigate how solvency and wholesale funding shocks to 84 OECD parent banks affect the lending of 375 foreign subsidiaries. We find that parent solvency shocks are more important than wholesale funding shocks for subsidiary lending. Furthermore, we find that parent undercapitalization does not affect the transmission of shocks, while wholesale shocks transmit to foreign subsidiaries of parents that rely primarily on wholesale funding. We also find that transmission is affected by the strategic role of the subsidiary for the parent and follows a locational, rather than an organizational pecking order. Surprisingly, liquidity regulation exacerbates the transmission of adverse wholesale shocks. We further document that parent banks tend to use their own capital and liquidity buffers first, before transmitting. Finally, we show that solvency shocks have higher impact on large subsidiary banks with low growth opportunities in mature markets.
T3  - SAFE working paper - 175 
KW  - commercial banks
KW  - global banks
KW  - wholesale shocks
KW  - solvency shocks
KW  - transmission
KW  - internal capital markets
Y1  - 2017
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/43747
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-437477
UR  - https://ssrn.com/abstract=3012016
PB  - SAFE
CY  - Frankfurt am Main
ER  -