Was it credit supply? Cross-border bank lending to emerging market economies during the financial crisis

14 June 2010

Cross-border bank lending dropped sharply during the financial crisis. This feature uses a panel regression framework to analyse the key drivers of cross-border bank lending to 21 emerging market economies between 1995 and 2009. The analysis suggests that both demand and supply factors contributed to the fall, but the impact of supply was stronger. The two factors seem to have had more balanced effects before the crisis.

JEL classification: F34, G15, G21