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Submitted by pscully on Mon, 09/19/2011 - 09:42.
09/29/2011 - 16:10
09/29/2011 - 17:30
STA/BST 290: Galina Hale (Federal Reserve Bank SF)
Global banking network and international capital flows
Thursday, September 29th, 2011 at 4.10pm, MSB 1147 (Colloquium Room)
Refreshments: 3.30pm, MSB 4110 (Statistics Lounge)
Speaker: Galina Hale (Senior Economist, Federal Reserve Bank of San Francisco)
Title: Global banking network and international capital flows
Abstract: We propose a new factor for understanding aggregate international capital flows: banks' positions in the global banking network (GBN). We construct the GBN at the bank level, using individual syndicated loan data from Loan Analytics for 1980-2007. Using gravity approach to modeling capital flows, we find that country-pairs in which banks are more closely connected within the GBN experience larger inflows and outflows of foreign direct investments, as well as portfolio equity and debt flows between them.
After identifying macroeconomic and institutional factors that help explain banks' positions in the GBN and, controlling for their effects, we find in a cross-country regression that countries in which banks were more centrally positioned in the GBN before 2000 experienced higher international capital inflows and outflows in 2001-2007. Network characteristics of banks have large effects and substantially improve the model's fit in gravity and cross-country regressions, but are less important in country fixed-effects panel regressions.