Basel Ii and Bank Lending to Emerging Markets: Micro Evidence from German Banks

34 Pages Posted: 18 Aug 2005

See all articles by Thilo Liebig

Thilo Liebig

Deutsche Bundesbank

Daniel Porath

University of Applied Sciences Mainz

Beatrice Weder di Mauro

Graduate Institute Geneva, IHEID; Graduate Institute Geneva, IHEID

Michael Wedow

European Central Bank (ECB) - Directorate Financial Stability and Supervision

Date Written: August 2005

Abstract

This paper investigates whether the new Basel Accord will induce a change in bank lending to emerging markets using a new loan level data set on German banks' foreign exposure. We test two interlinked hypotheses on the conditions under which the change in the regulatory capital would leave lending flows unaffected. This would be the case if (i) the new regulatory capital requirement remains below the economic capital, and (ii) banks' economic capital to emerging markets already adequately reflects risk. On both accounts the evidence indicates that the new Basel Accord should have a limited effect on lending to emerging markets.

Keywords: Basel accord, banking regulation, international lending

JEL Classification: F33, F34, G28

Suggested Citation

Liebig, Thilo and Porath, Daniel and Weder di Mauro, Beatrice and Weder di Mauro, Beatrice and Wedow, Michael, Basel Ii and Bank Lending to Emerging Markets: Micro Evidence from German Banks (August 2005). CEPR Discussion Paper No. 5163, Available at SSRN: https://ssrn.com/abstract=785906

Thilo Liebig (Contact Author)

Deutsche Bundesbank ( email )

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

Daniel Porath

University of Applied Sciences Mainz ( email )

An der Bruchspitze 50
Mainz 55122
Germany

HOME PAGE: http://www.fh-mainz.de/index.php?id=5726&lastArticle=4692&cHash=b12d1fc2e8#4692

Beatrice Weder di Mauro

Graduate Institute Geneva, IHEID ( email )

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

Graduate Institute Geneva, IHEID ( email )

Chemin Eugene Rigot 2
Geneva, 1211
Switzerland

Michael Wedow

European Central Bank (ECB) - Directorate Financial Stability and Supervision ( email )

Frankfurt a.M.
Germany

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