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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title Do Exposures to Sagging Real Estate, Subprime or Conduits Abroad Lead to Contraction and Flight to Quality in Bank Lending at Home?
Organization Unit
Authors
  • Steven Ongena
  • Gunseli Tumer-Alkan
  • Natalja v. Westernhagen
Item Subtype Original Work
Refereed Yes
Status Published in final form
Language
  • English
Journal Title Review of Finance
Geographical Reach international
Volume 22
Number 4
Page Range 1335 - 1373
Date 2018
Abstract Text We investigate how differential exposures by German banks to the US real estate market affect domestic lending in Germany when home prices started to decline in the US. We find that banks with an exposure to the US real estate sector and to conduits shift their domestic lending to industry–region combinations with lower insolvency ratios following a decrease in US home prices. These banks also contract their lending to German firms more than banks that do not have such exposure. We mainly document that possible losses abroad shift bank lending at home where the size of the effect depends on the type and the degree of exposure the bank has.
Related URLs
Digital Object Identifier 10.1093/rof/rfy011
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