Discussion Paper Details

Please find the details for DP10139 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Global Bank Lending Flows: Identifying the Flight Home Effect

Author(s): Caroline Van Rijckeghem and Beatrice Weder di Mauro

Publication Date: September 2014

Keyword(s): deglobalization, financial protectionism and international banking system

Programme Area(s): International Macroeconomics

Abstract: We propose a general specification to estimate the strength of the flight home effect, provide a decomposition into lender and recipient effects and country-by country measures. Flight home occurs when the change in domestic credit extended by domestic banks cannot be accounted for by recipient or lender effects. Based on break-adjusted BIS data, we find evidence of flight home for almost all banking systems with the notable exception of Canada, the US and Japan. In periods of relative calm, reversals of the home bias are small. The result is cumulative renationalization of bank lending.

For full details and related downloads, please visit:

Bibliographic Reference

Van Rijckeghem, C and Weder di Mauro, B. 2014. 'Global Bank Lending Flows: Identifying the Flight Home Effect'. London, Centre for Economic Policy Research.