Using a panel of annual data, covering 2207 banks operating in 45 emerging, and developing economies, over the period of 2009–2020, we study the impact of liberalization on capital inflows. Our results indicate that capital inflow liberalization has a robust and positive impact on bank credit risk, as measured by non-performing loans. Upon further examination, we find that the positive effect is more pronounced when bond, money, and financial credit markets, which broaden firms’ financing channels, are liberalized. The liberalization intensifies competition and risk appetite among banks, leading to increased credit risk. The findings suggest that openness reduces banks’ credit growth while improving non-interest income. As expected, this positive effect is mitigated within large and competitive banks, and banks with more assets. Furthermore, we find that tightening macroprudential policies, especially countercyclical capital buffers, can help moderate the positive impact of capital inflow liberalization on bank credit risk.

中文翻译：

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资本流入自由化与银行信用风险

我们使用涵盖 2009 年至 2020 年期间在 45 个新兴和发展中经济体运营的 2207 家银行的年度数据，研究自由化对资本流入的影响。我们的研究结果表明，资本流入自由化对银行信用风险（以不良贷款衡量）具有强劲而积极的影响。进一步考察，我们发现，当债券、货币、金融信贷市场开放时，拓宽企业融资渠道的积极效应更加明显。自由化加剧了银行之间的竞争和风险偏好，导致信用风险增加。研究结果表明，开放性降低了银行的信贷增长，同时提高了非利息收入。正如预期的那样，这种积极影响在大型且有竞争力的银行以及拥有更多资产的银行中有所减弱。此外，我们发现收紧宏观审慎政策，特别是逆周期资本缓冲，有助于缓解资本流入自由化对银行信用风险的积极影响。