{
  "title": "Are Foreign Banks a 'Safe Haven'? Evidence from Past Banking Crises",
  "publication": "IMF Working Papers, February 26, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/are-foreign-banks-a-safe-haven-evidence-from-past-banking-crises-42743",
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  "summary": "The presence of foreign banks in emerging markets has increased markedly over the last two decades, raising questions about their potentially stabilizing or destabilizing role during times of financial distress. Most studies on this subject have focused on banks’ asset side (i.e.",
  "sections": [
    {
      "heading": "Research question and scope",
      "content": "- Focus: depositor behavior (liability side) vis-à-vis foreign banks during banking crises.\n- Empirical setting: banking crises in Argentina and Uruguay over the period 1994-2002.\n- Core questions:\n  - Are foreign banks perceived as a safe haven during bank runs?\n  - Does legal structure (branch versus subsidiary) matter?\n  - Do perceptions depend on the nature of the crisis?"
    },
    {
      "heading": "Data and methods (as described)",
      "content": "- Data source: episodes of banking crises in Argentina and Uruguay, 1994-2002.\n- Unit of analysis: depositors’ behavior and deposit flows across domestic, foreign-branch, and foreign-subsidiary banks.\n- Episodes analyzed: five bank run episodes (explicit count provided in summary)."
    },
    {
      "heading": "Key findings",
      "content": "- The commonly held view that foreign banks play a stabilizing role during domestic banking crises is not supported by robust evidence in this study.\n- Empirical result on safe-haven perceptions:\n  - Only in one (large) bank run episode, out of five studied, is there evidence of safe haven perceptions towards foreign branches.\n- No broad or consistent pattern across episodes that foreign banks systematically attract depositor flight during crises."
    },
    {
      "heading": "Policy-relevant implications (derived from findings)",
      "content": "- Policymakers should not assume foreign bank presence automatically provides depositor stability during domestic banking crises.\n- Legal structure (branch versus subsidiary) can matter in specific episodes, but evidence of systematic safe-haven effects is limited.\n- Crisis preparedness and depositor protection measures should be designed without relying on a presumed stabilizing role of foreign banks."
    },
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      "heading": "Publication and metadata (as provided)",
      "content": "- Authors: Gustavo Adler, Eugenio M Cerutti\n- Date: February 26, 2015\n- Pages: 27\n- Volume: 2015\n- Issue: 043\n- Series: Working Paper No. 2015/043\n- Stock No: WPIEA2015043\n- DOI: https://doi.org/10.5089/9781616357047.001\n- ISBN: 9781616357047\n- ISSN: 1018-5941\n- Subjects and keywords: Bank deposits, Banking, Commercial banks, Exchange rate risk, Financial institutions, Financial regulation and supervision, Financial services, Foreign banks, State-owned banks; Keywords include bank run, deposit loss, deposit withdrawal, depositor base, non-resident deposit, WP.\n\nSource: IMF Working Paper \"Are Foreign Banks a 'Safe Haven'? Evidence from Past Banking Crises\" by Gustavo Adler and Eugenio M Cerutti (February 26, 2015).\n\n---\n\n Content in this bundle\n\n- wp1543\n  - wp1543 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1543 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/are-foreign-banks-a-safe-haven-evidence-from-past-banking-crises-42743"
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    "Authors: Gustavo Adler, Eugenio M Cerutti",
    "Published: February 26, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781616357047.001",
    "Focus: depositor behavior (liability side) vis-à-vis foreign banks during banking crises.",
    "Empirical setting: banking crises in Argentina and Uruguay over the period 1994-2002.",
    "Core questions:",
    "Data source: episodes of banking crises in Argentina and Uruguay, 1994-2002.",
    "Unit of analysis: depositors’ behavior and deposit flows across domestic, foreign-branch, and foreign-subsidiary banks.",
    "Episodes analyzed: five bank run episodes (explicit count provided in summary).",
    "The commonly held view that foreign banks play a stabilizing role during domestic banking crises is not supported by robust evidence in this study.",
    "Empirical result on safe-haven perceptions:",
    "No broad or consistent pattern across episodes that foreign banks systematically attract depositor flight during crises.",
    "Policymakers should not assume foreign bank presence automatically provides depositor stability during domestic banking crises.",
    "Legal structure (branch versus subsidiary) can matter in specific episodes, but evidence of systematic safe-haven effects is limited.",
    "Crisis preparedness and depositor protection measures should be designed without relying on a presumed stabilizing role of foreign banks.",
    "Authors: Gustavo Adler, Eugenio M Cerutti",
    "Date: February 26, 2015",
    "Pages: 27",
    "Volume: 2015",
    "Issue: 043",
    "Series: Working Paper No. 2015/043",
    "Stock No: WPIEA2015043",
    "DOI: https://doi.org/10.5089/9781616357047.001",
    "ISBN: 9781616357047",
    "ISSN: 1018-5941",
    "Subjects and keywords: Bank deposits, Banking, Commercial banks, Exchange rate risk, Financial institutions, Financial regulation and supervision, Financial services, Foreign banks, State-owned banks; Keywords include bank run, deposit loss, deposit withdrawal, depositor base, non-resident deposit, WP.",
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