Definiciones conceptuales de Inteligencia Emocional según

As the move towards greater international financial integration persists, the potential for risk transmission and contagion across borders will also be heightened. Against this background, this paper aims to understand the transmission of shocks from the global market to the Malaysian economy via the balance sheet of foreign banks, focusing in particular on the lending of foreign bank affiliates during the global financial crisis.

Malaysia’s banking system has a sizeable presence of foreign players which accounts for approximately a fifth of the market share of the banking system assets. In terms of lending activities, foreign banks recorded approximately double-digit annual loan growth between 2006 and 2008 before showing signs of moderation in 2009.

Cross-border loans accounted on average for about 80% of external positions of the BIS reporting banks vis-à-vis Malaysia. Total foreign claims of international banks on Malaysia began to surge from mid-2003 to mid-2007, driven largely by the growth in local claims in local currency. The bulk of the outstanding foreign claims on Malaysia is dominated by European banks which became more pronounced amid the on-set of the crisis.

This paper attempted to answer the questions of whether the internal capital market or funding conditions of global banks provided support to the subsidiaries in extending credits during the recent global financial crisis, by using a standard panel estimation on monthly data of 12 foreign banks in Malaysia for the period of January 2000 to December 2009. The results indicate that firstly, there is no robust evidence supporting the existence of the internal capital market effect on the subsidiaries of global banks with home countries and in the regions of North America, Europe and Asia. These findings are inconclusive in determining whether all foreign bank subsidiaries with access to internal capital from parent companies provided stabilising effects on Malaysia from shocks caused by the global financial crisis. The inconclusive result could possibly be due to the fact that all foreign banks in Malaysia are locally incorporated and the lending and deposits taking activities are mainly directed towards the domestic economic activities. Secondly, unprofitable banks may assume greater credit risks to gain bigger profits while foreign banks with bigger assets size would extend more credits. This supports the well accepted notion that profitability and assets size are important factors in driving foreign bank lending activities.

While cross-border lending and internal capital markets could be the channels for international shock transmission, our empirical study suggests the importance of national authorities in reducing the concentration of foreign banks from specific countries or regions. The findings of this paper also bring to the fore, the importance of prudential regulations. Global recommendations on cross-border bank supervision and resolution are much discussed and debated currently. Among the suggestions are for the national authorities to promote better coordination in cross-border resolutions; strengthen risk mitigation mechanisms that reduce contagion and systemic risks during a crisis; and for home and host authorities to agree on arrangements that would ensure the timely production and sharing of needed information both for purposes of contingency planning during normal times and for cross-border crisis management and resolution during times of distress. Inevitably, these recommendations need to be further strengthened and adapted to suit the local context. This would require much by way of the harmonisation and coordination of national laws. In tandem with the more extensive cross-border operations of the major domestic financial conglomerates, greater collaboration between the Bank and host regulators within the region has also become a key priority to support the effective supervision of financial groups. The Bank is also actively participating in supervisory collaboration to facilitate the timely sharing of information and improved cross-border collaboration with other home and host supervisors.

References

Aisen, Ari and Franken, Michael, (2010), “Bank Credit During the 2008 Financial Crisis: A Cross-Country Comparison”, IMF Working Paper WP/10/47. Bank Negara Malaysia, (1999), “The Central Bank and the Financial System in Malaysia: A Decade of Change, 1989-1999”, Kuala Lumpur, Malaysia. Bank Negara Malaysia, (2009), “Financial Stability and Payments System Report”,

Kuala Lumpur, Malaysia.

Cetorelli, Nicola and Goldberg, Linda, (2009), “Globalized Banks: Lending to Emerging Markets in the Crisis”, Staff Reports No. 377, Federal Reserve Bank of New York.

Cetorelli, Nicola and Goldberg, Linda, (2010), “Global Banks and International Shock Transmission: Evidence from the Crisis, Staff Reports No. 446, Federal Reserve Bank of New York.

De Haas, Ralph and Lelyveld, Iman van, (2009), “Internal Capital Market and lending by Multinational Bank Subsidiaries”, Journal of Financial Intermediation, No.19, pp. 1-25.

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Herrman, Sabine and Mihaljek, Dubravko, (2010), “The Determinants of Cross- border Bank Flows to Emerging Markets: New Empirical Evidence on the Spread of Financial Crises”, BIS Working Paper No. 315. July 2010. Houston, J.F., James, C. and Marcus, D., (1997), “Capital Market Frictions and

the Role of Internal Capital Markets In Banking”, Journal of Finance Economics, 46, pp. 135-64.

Martinez-Peria, Powell and Vladkova-Hollar, (2005), “Banking on Foreigners: The Behavior of International Bank Claims on Latin America, 1985-2000”, IMF Staff Papers, Vol. 52, No.3, pp. 430-461.

McGuire, Patrick and von Peter, Goetz, (2009), “The US Dollar Shortage in Global Banking”, BIS Quarterly Review, March 2009.

McGuire, Patrick and Tarashev, Nikola, (2008), “Bank Health and Lending to Emerging Markets”, BIS Quarterly Review, December 2008.

Navaretti et al., (2010), “Multinational Banking in Europe: Financial Stability and Regulatory Implications Lessons from the Financial Crisis”, Paper Prepared for the Economy Policy Panel, Madrid.

Takáts, Elod, (2010), “Was it Credit Supply? Cross-border Bank Lending to Emerging Market Economies during the Financial Crisis”, BIS Quarterly Review, June 2010.

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1. Author is Deputy Assistant Director, Bank Supervision Department, Central Bank of

Chapter 6

INTERNATIONAL AND CROSS BORDER BANK LENDING