German Bank Lending During Financial Crises: A Bank Level Analysis

43 Pages Posted: 18 Aug 2005

See all articles by Frank Heid

Frank Heid

Deutsche Bundesbank

Thorsten Nestmann

University of Mainz - Department of Economics

Natalja von Westernhagen

Deutsche Bundesbank

Beatrice Weder di Mauro

Graduate Institute Geneva, IHEID; Graduate Institute Geneva, IHEID

Date Written: August 2005

Abstract

This paper studies German bank lending during the Asian and Russian crises, using a bank level data set from the Deutsche Bundesbank. Our aim is to gain more insight into the pattern of German bank lending during financial crises in emerging markets. We find that German banks reacted to the Asian crisis mainly by reallocating their portfolios among emerging markets. By contrast, the banks' behavior during the Russian crisis is characterized by a general withdrawal from emerging markets. We find that the lending of large commercial banks was less stable than the lending of public sector banks during the Asian crisis. Differences were not as pronounced during the Russian crisis.

Keywords: Banking, currency crises, emerging markets crises, contagion, financial stability, bank lending

JEL Classification: F30, F32, F34

Suggested Citation

Heid, Frank and Nestmann, Thorsten and von Westernhagen, Natalja and Weder di Mauro, Beatrice and Weder di Mauro, Beatrice, German Bank Lending During Financial Crises: A Bank Level Analysis (August 2005). CEPR Discussion Paper No. 5164, Available at SSRN: https://ssrn.com/abstract=785909

Frank Heid (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Thorsten Nestmann

University of Mainz - Department of Economics ( email )

Chair of Corporate Finance
D-55099 Mainz, 55128
Germany

Natalja Von Westernhagen

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Beatrice Weder di Mauro

Graduate Institute Geneva, IHEID ( email )

Chemin Eugene Rigot 2
Geneva, 1211
Switzerland

Graduate Institute Geneva, IHEID ( email )

Geneva Avenue de la Paix 11A
Geneva, 1202
Switzerland
1211 (Fax)

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