Foreign Currency Loans – Demand or Supply Driven?


Brown, Martin ; Kirschenmann, Karolin ; Ongena, Steven



URL: http://www.snb.ch/n/mmr/reference/working_paper_20...
Document Type: Working paper
Year of publication: 2011
The title of a journal, publication series: Swiss National Bank Working Papers
Volume: 2011-2
Place of publication: Zürich
ISSN: 1660-7716 , 1660-7724
Edition: Version July 23, 2010
Publication language: English
Institution: Business School > Sonstige - Fakultät für Betriebswirtschaftslehre
Subject: 330 Economics
Abstract: Motivated by concerns over foreign currency exposures of banks in Emerging Europe, we examine the currency denomination of business loans made in Bulgaria during the period 2003-2007. We analyze a unique dataset including information on the requested and granted currency for more than hundred thousand loans granted by one bank to sixty thousand different firms. This data set allows us to disentangle demand-side from supply-side determinants of foreign currency loans. We find that 32% of the foreign currency loans disbursed in our sample were actually requested in local currency by the firm. Our analysis suggests that the bank lends in foreign currency, not only to less risky firms, but also when the firm requests a long-term loan and when the bank itself has more funding in euro. These results imply that foreign currency borrowing in Eastern Europe is not only driven by borrowers who try to benefit from lower interest rates but also by banks hesitant to lend long-term in local currency and eager to match the currency structure of their assets and liabilities.

Dieser Eintrag ist Teil der Universitätsbibliographie.




+ Citation Example and Export

Brown, Martin ; Kirschenmann, Karolin ; Ongena, Steven (2011) Foreign Currency Loans – Demand or Supply Driven? Swiss National Bank Working Papers Zürich 2011-2 [Working paper]


+ Search Authors in

+ Page Views

Hits per month over past year

Detailed information



You have found an error? Please let us know about your desired correction here: E-Mail


Actions (login required)

Show item Show item