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Foreign banks can play an important role in facilitating international trade. Most research has focused on the financing role banks can play, but less is known about the information role. This paper estimates a gravity model using sub-regional data from Turkey between 2002 and 2010 to explore whether foreign banks promote trade through the information channel. The presence of a foreign banks from a trade partner promote the exports of the sub-region. In addition, the analysis finds that the footprint of these foreign banks matters more for exports than the presence of these banks and the level of financial development of the sub-region. Banks from countries neighboring trade partners can also decrease exports. When taking into account financial conditions and examining the differential impacts during the recent financial crisis, the analysis finds that the footprint of foreign banks has the largest impact on trade.

Credit Constraints --- Foreign Banks --- Regional Development --- Trade

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Between 1995 and 2005, foreign bank participation in Mexico rose from 2 percent of bank assets to 83 percent, as the top five largest banks were acquired by foreigners. This paper examines the link between foreign bank acquisitions and banking outreach. Using quarterly country, bank, and bank-municipality-level data, the authors find some contrasting patterns. As foreign bank participation rose due to foreign acquisitions, the number of municipalities with bank presence increased but the number of loan and deposit accounts fell for the country as a whole and for banks after they became foreign. The drop in the number of loans, however, was partially off-set by an increase in domestic bank loans. Further, the decline in loan and deposit accounts was more pronounced in more rural and poorer areas. Finally, only very rich and urban areas experienced an increase in branches after foreign acquisition.

Access to Finance --- Bank Acquisitions --- Banking Sector --- Banking Sector Development --- Banking Services --- Banking Stability --- Banks --- Banks and Banking Reform --- Corporate Law --- Debt Markets --- Finance and Financial Sector Development --- Financial Crises --- Financial Services --- Foreign Banks --- Law and Development --- Municipalities

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The "conventional wisdom" in academic and policy circles argues that, while large and foreign banks are generally not interested in serving SMEs, small and niche banks have an advantage in doing so because they can overcome SME opaqueness through relationship lending. This paper shows that there is a gap between this view and what banks actually do. Banks perceive SMEs as a core and strategic business and seem well positioned to expand their links with SMEs. The recent intensification of bank involvement with SMEs in various emerging markets documented in this paper is neither led by small or niche banks nor highly dependent on relationship lending. Rather, all types of banks are catering to SMEs and larger, multiple-service banks have in fact a comparative advantage in offering a wide range of products and services on a large scale, through the use of new technologies, business models, and risk management systems.

Access to Finance --- Bank --- Banks and Banking Reform --- Debt Markets --- Emerging markets --- Enterprises --- Finance --- Finance and Financial Sector Development --- Financial Intermediation --- Foreign banks --- Governments --- Lending --- Risk --- Risk management --- Services

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This paper analyzes the lending behavior of foreign-owned banks during the recent global crisis. Using bank-level panel data for countries in Central and Eastern Europe, East Asia, and Latin America, the paper explores the role of affiliate and parent financial characteristics, host location, as well as the impact of parent geographic origin and reach on foreign banks' credit growth. Overall, the analysis finds robust evidence that foreign banks curtailed the growth of credit relative to other banks, independent of the host region. Banks from the United States reduced loan growth less than other parent banks. Neither the global nor regional reach of parent banks influenced the lending growth of foreign affiliates. However, the funding structure of foreign bank affiliates and the capitalization of parent banks do help explain the lending behavior of foreign banks during the global crisis. Although not the focus of the paper, it also finds that government-owned banks played a countercyclical role in all regions.

Access to Finance --- Bank Lending --- Bankruptcy and Resolution of Financial Distress --- Banks & Banking Reform --- Crisis --- Debt Markets --- Finance and Financial Sector Development --- Financial Globalization --- Financial Intermediation --- Foreign Banks --- Private Sector Development

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The "conventional wisdom" in academic and policy circles argues that, while large and foreign banks are generally not interested in serving SMEs, small and niche banks have an advantage in doing so because they can overcome SME opaqueness through relationship lending. This paper shows that there is a gap between this view and what banks actually do. Banks perceive SMEs as a core and strategic business and seem well positioned to expand their links with SMEs. The recent intensification of bank involvement with SMEs in various emerging markets documented in this paper is neither led by small or niche banks nor highly dependent on relationship lending. Rather, all types of banks are catering to SMEs and larger, multiple-service banks have in fact a comparative advantage in offering a wide range of products and services on a large scale, through the use of new technologies, business models, and risk management systems.

Access to Finance --- Bank --- Banks and Banking Reform --- Debt Markets --- Emerging markets --- Enterprises --- Finance --- Finance and Financial Sector Development --- Financial Intermediation --- Foreign banks --- Governments --- Lending --- Risk --- Risk management --- Services