Financial Crises and the Composition of Cross-Border Lending


Eugenio Cerutti

Galina Hale

Camelia Minoiu

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2014-20 | August 1, 2014

We examine the composition and drivers of cross-border bank lending between 1995 and 2012, distinguishing between syndicated and non-syndicated loans. We show that on-balance sheet syndicated loan exposures, which account for almost one third of total cross-border loan exposures, increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis. Our empirical analysis of the drivers of cross-border loan exposures in a large bilateral dataset leads to three main results. First, banks with lower levels of capital favor syndicated over other kinds of cross-border loans. Second, borrower country characteristics such as level of development, economic size, and capital account openness, are less important in driving syndicated than non-syndicated loan activity, suggesting a diversification motive for syndication. Third, information asymmetries between lender and borrower countries became more binding for both types of cross-border lending activity during the recent crisis.

Article Citation

Minoiu, Camelia, Eugenio Cerutti, and Galina Hale. 2014. “Financial Crises and the Composition of Cross-Border Lending,” Federal Reserve Bank of San Francisco Working Paper 2014-20. Available at