Foreign Banks and the Vienna Initiative: Turning Sinners into Saints?

By Ralph De Haas, Y. Korniyenko, Alexander Pivovarsky, Elena Loukoianova. Social Science Research Network, 2012

116 citations recorded by the source corpus.

We use data on 1,294 banks in Central and Eastern Europe to analyze how bank ownership and creditor coordination in the form of the Vienna Initiative affected credit growth during the 2008–09 crisis. As part of the Vienna Initiative western European banks signed country-specific commitment letters in which they pledged to maintain exposures and to support their subsidiaries in Central and Eastern Europe. We show that both domestic and foreign banks sharply curtailed credit during the crisis, but that foreign banks that participated in the Vienna Initiative were relatively stable lenders. We find no evidence of negative spillovers from countries where banks signed commitment letters to countries where they did not.

Subfields: Finance

View Paper: https://www.semanticscholar.org/paper/123564d566143b5c6eb0de80a2e6148ff4409f25

Citations in the corpus

• Financial Globalisation and the Crisis (2012, unknown): “The most notable example is the Vienna Initiative by which Western European parent banks agreed to maintain commitments vis-a-vis affiliates in Central and Eastern Europe during the initial stages of the global financial crisis (see De Haas et al. 2012).”