03 May 2013

金融危機におけるレポ取引とグループ内取引の状況に関するドイツ連邦銀行の分析レポート

This study furthermore reveals substantial differences in bank-internal fund management when comparing the roles played by branches and subsidiaries as well as with regard to the various episodes of the financial crisis. The greater the branches’ responsibility within the banking organisation for the provision of loans to the foreign non-bank private sector, the more parent banks protected branches. Liquidity was, however, withdrawn from subsidiaries, the stronger their standing in their respective local funding market. The allocation of such roles reflects the fact that German banks’ foreign branches are often the main pillar for the lending business with foreign firms. German banks’ foreign branches were consequently protected in times of distress, despite the fact that their consolidation into the parent banks’ balance sheets facilitates the withdrawal of funds. Compared with branches, subsidiaries have more often established a larger network of local depositors and investors as these are independent legal entities. Accordingly, the multinational banks took recourse to their funding strength in times of crisis. This clear pattern in the fund management of German multinational banks disappeared, however, as the financial crisis progressed. It is possible that the scope for protecting branches in major lending locations narrowed and that the ability to withdraw funds from subsidiaries became limited due to their obligation to fulfill local regulatory requirements.

Among the three events which triggered the loss of confidence in repo markets, the failure of Bear Stearns led, on average, to the largest withdrawal of funds from foreign affiliates in response to the funding shock experienced by their respective parent banks. The bankruptcy of Lehman Brothers prompted fewer reallocations of funds on internal capital markets towards the parent bank. Possibly, following the earlier shock event, banks had become willing or able to replace repo funding with other short-term funding sources. Most likely, rescue measures, such as the expansion of the Eurosystem’s collateral framework, helped to ease the pressure on banks that had relied heavily on secured short-term funding and were strongly affected by the unexpected deterioration of this market. All in all, the results demonstrate that the rapid spreading of the financial crisis occurred both via short-term funding on interbank markets as well as via bank-internal capital markets.

Full paper

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