Foreign Bank Identity : Does it Matter for Credit Growth?

This paper provides robust evidence that the home country identity of a foreign-owned bank is an important consideration for credit growth. Among the set of foreign-owned banks we find significant differences in loan growth between banks from advanced than emerging source countries during the Global Financial Crisis. Further, we provide evidence that the regulatory framework prevailing in the home country is correlated with loan growth in the host economy. We show that foreign-owned banks from source countries with higher capital regulatory requirements were associated with significantly less loan growth pre-crisis, but provided a buffer during the crisis