Banks around the world, particularly in emerging markets, often face large shocks to their supply of liquidity due to regime shifts, speculative bank runs, “hot money” flows, or exchange rate volatility. Many argue that banks pass these fluctuations on to borrowing firms even when there is no change in the firms’ overall credit worthiness. This can lead to large real effects if firms are unable...

We develop an empirical approach for identifying comparative advantages in bank lending. Using matched credit-export data from Peru, we first uncover patterns of bank specialization by export market: every country has a subset of banks with an abnormally large loan portfolio exposure to its exports. Using outliers to measure specialization, we use a revealed preference approach to show that ban...

Bank liquidity shortages during the global financial crisis of 2007–2009 led to introduction regulations, impact which has attracted attention academics and policymakers. In this paper, we investigate regulation on bank lending. As a setting, use Netherlands, where Liquidity Balance Rule (LBR) was introduced in 2003. The LBR imposed Dutch banks only did not apply other operating elsewhere withi...