## Bank Funding Costs for International Banks

_IMF Working Papers, April 30, 2014_

## Source details

**Canonical URL:** [Bank Funding Costs for International Banks](https://www.imf.org/en/publications/wp/issues/2016/12/31/bank-funding-costs-for-international-banks-41514)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/bank-funding-costs-for-international-banks-41514/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/bank-funding-costs-for-international-banks-41514/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/bank-funding-costs-for-international-banks-41514/bundle-manifest.json)

## Bibliographic details
- Authors: Rita Babihuga, Marco Spaltro
- Published: April 30, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475517910.001

---

### Sample and scope
- Sample period: 2001–12.
- Focus: determinants of banks’ unsecured funding costs for a sample of internationally active banks.

### Determinants of funding costs
- Bank-specific characteristics associated with changes in unsecured funding costs:
  - an institution’s credit worthiness.
  - the return on its market value.
  - the level and quality of capital.
- Market factors associated with funding costs:
  - the level of investor risk appetite.
  - shocks to financial markets, notably the US subprime crisis and the Euro Area sovereign debt crisis.

### Crisis effects and dynamics
- The US subprime crisis and the Euro Area sovereign debt crisis were key drivers of the sharp rise in bank funding costs.
- Large systemically important institutions enjoyed a funding advantage, and this advantage increased since the onset of the two crises.

### Evolution by end-2012
- With the exception of Euro Area periphery banks, by end-2012 the rise in funding costs had generally been reversed for most major banks.
- Reversal drivers:
  - improvements in bank asset quality.
  - steps taken to increase resilience, notably higher capitalization.

### Policy implications and recommendations
- Results suggest increased capital buffers may potentially support bank lending to the real economy by reducing bank funding costs.

### Key publication identifiers (from source)
- Pages: 38
- Volume: 2014
- Issue: 071
- Series: Working Paper No. 2014/071
- DOI: https://doi.org/10.5089/9781475517910.001

*Source: IMF Working Paper No. 2014/071 — Bank Funding Costs for International Banks.*

---

## Content in this bundle

- **Wp1471**
  - [Wp1471 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp1471.pdf.md){rel="alternate" type="text/markdown"}
  - [Wp1471 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp1471.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/bank-funding-costs-for-international-banks-41514_