## Uncertainty and Cross-Border Banking Flows

_IMF Working Papers, January 5, 2018_

## Source details

**Canonical URL:** [Uncertainty and Cross-Border Banking Flows](https://www.imf.org/en/publications/wp/issues/2018/01/05/uncertainty-and-cross-border-banking-flows-45539)

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## Bibliographic details
- Authors: Sangyup Choi, Davide Furceri
- Published: January 5, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484336793.001

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### Overview and research objective
- Paper examines the effects of country-specific uncertainty shocks on cross-border banking flows.
- Uses confidential Bank for International Settlements Locational Banking Statistics data with a dyadic structure to disentangle supply and demand factors.
- Authors: Sangyup Choi, Davide Furceri
- Date: January 5, 2018
- Format: IMF Working Papers

### Key findings
- Uncertainty is both a push and pull factor that robustly predicts a decrease in both outflows (retrenchment) and inflows (stops).
- Global banks rebalance their lending towards safer foreign borrowers from local borrowers when facing higher uncertainty.
- This rebalancing occurs only towards advanced economies (flight to quality), but not emerging market economies.

### Methodology and data notes
- Empirical analysis based on the dyadic structure of BIS Locational Banking Statistics to better identify effects on cross-border banking flows.
- Country-specific uncertainty shocks are the focus, distinguishing from global measures such as the VIX.

### Subjects and keywords
- Subjects: Balance of payments, Bank credit, Banking, Capital flows, Cross-border banking, Emerging and frontier financial markets, Financial markets, Financial services, Money, Stock markets
- Keywords: Bank credit, banking flow, banking office, Capital flows, Cross-border banking, cross-border banking flows, cross-border claim, cross-border lending, Emerging and frontier financial markets, flight-to-quality, Global, global bank, lending activity, portfolio rebalancing, retrenchment, Stock markets, sudden stops, uncertainty, WP

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## Content in this bundle

- **Uncertainty and Cross-Border Banking Flows, WP/18/4, January 2018**
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_Source: https://www.imf.org/en/publications/wp/issues/2018/01/05/uncertainty-and-cross-border-banking-flows-45539_