krause_07

Emory University
Department of Economics
Working Papers

Title: Latin American Banking Fragility: An Assessment of the Role Played by Foreign Banks

Number: 07-13

Author: Lindsay Jones and Stefan Krause

Issue Date: August 2007

Abstract: The purpose of this paper is to determine whether foreign bank presence has had a stabilizing or destabilizing effect on the Latin American banking sector. Our results suggest that, while "brick and mortar" operations of foreign banks in Latin American countries contribute to the reduction of the probability of a banking crisis, there is no significant effect of direct foreign lending initiated outside the country on the likelihood of experiencing financial distress.

Title:	Latin American Banking Fragility: An Assessment of the Role Played by Foreign Banks
Number:	07-13
Author:	Lindsay Jones and Stefan Krause
Issue Date:	August 2007
Abstract:	The purpose of this paper is to determine whether foreign bank presence has had a stabilizing or destabilizing effect on the Latin American banking sector. Our results suggest that, while "brick and mortar" operations of foreign banks in Latin American countries contribute to the reduction of the probability of a banking crisis, there is no significant effect of direct foreign lending initiated outside the country on the likelihood of experiencing financial distress.

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