Capital Inflows, Sovereign Debt and Bank Lending: Micro-Evidence from an Emerging Market

Autor:	Tomas Williams
Rok vydání:	2018
Předmět:	Economics and Econometrics 050208 finance 05 social sciences Debt-to-GDP ratio Financial system External debt Treasury Accounting 0502 economics and business Government bond Debt ratio Business Internal debt 050207 economics Debt levels and flows Emerging markets Finance
Zdroj:	The Review of Financial Studies. 31:4958-4994
ISSN:	1465-7368 0893-9454
Popis:	This paper uses a natural experiment to show that government access to foreign credit increases private access to credit. I identify a sudden, and unanticipated increase in capital inflows to the sovereign debt market in Colombia, due to a rebalancing in a government bond index by J.P. Morgan. I find that market makers banks in the treasury market reduced their sovereign debt by 7.8 percentage points of assets and increased their credit availability by 4.2 percentage points of assets. Using industry level data, I show that a higher exposure to market makers led to a higher growth in economic activity. Received August 17, 2017; editorial decision January 25, 2018 by Editor Philip Strahan. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.
Databáze:	OpenAIRE
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