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Credit spillovers from Eur banks to EM

Makes sense. I always wondered how that loan demand was accommodated. Never looked like the kind of lending US regulators would sanction. Karim writes: Interesting table from JPM. Much larger dependence on credit from Eur banks for LATAM economies than from U.S. banks. Poland/Russia not as surprising but still large! Overall, domestic bank lending surveys in EM have also been moving towards [...]

Makes sense.

I always wondered how that loan demand was accommodated.
Never looked like the kind of lending US regulators would sanction.


Karim writes:

Interesting table from JPM.
Much larger dependence on credit from Eur banks for LATAM economies than from U.S. banks.
Poland/Russia not as surprising but still large!
Overall, domestic bank lending surveys in EM have also been moving towards a net tightening of lending standards.

Could be more severe credit contraction in those economies as a result of ongoing strains in Europe.

Euro area and US bank claims on EM
As of 2Q11EUR BanksUS Banks
$ bn% of dom cred$ bn% of dom cred
EM1980.712.4811.35.1
EM Asia406.73.2472.03.8
China90.61.081.70.9
Korea68.46.395.18.8
Latam618.138.7248.515.6
Brazil285.023.197.67.9
Russia113.516.123.83.4
Poland249.095.614.45.5

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