25 Years IWH

Dr Matias Ossandon Busch

Dr Matias Ossandon Busch
Current Position

since 10/13

Economist in the Department of Financial Markets

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 10/13

International Banking Library

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

Research Interests

  • empirical banking
  • financial and real sector interactions
  • international banking in emerging countries

Matias Ossandon Busch joined the Department of Financial Markets in October 2013. His research focuses on international banking, financial contagion through international banks, and the evaluation of policy interventions in the banking sector, with a special focus on developing countries.

Matias Ossandon Busch obtained an undergraduate degree from Adolfo Ibañez University, Chile, his master's degree from Eberhard Karls Universität Tübingen, and a PhD from Otto von Guericke University Magdeburg. Prior to joining the IWH, he held the position of research fellow at the Institute Libertad y Desarrollo, Chile, lecturer in microeconomics at the Universidad del Desarrollo, Chile, and visiting researcher at the Research Centre of the Deutsche Bundesbank.

Your contact

Dr Matias Ossandon Busch
Dr Matias Ossandon Busch
Mitglied - Department Financial Markets
Send Message +49 345 7753-781

Publications

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Foreign Funding Shocks and the Lending Channel: Do Foreign Banks Adjust Differently?

Felix Noth Matias Ossandon Busch

in: Finance Research Letters, November 2016

Abstract

We document for a set of Latin American emerging countries that the different nature of foreign funding accessed by foreign and local banks affected their lending performance after September 2008. We show that lending growth was weaker for shock-affected foreign banks compared to shock-affected local banks. This evidence represents valuable policy information for regulators concerned with the stability and well-functioning of banking sectors. 

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Working Papers

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Banks Fearing the Drought? Liquidity Hoarding as a Response to Idiosyncratic Interbank Funding Dry-ups

Helge Littke Matias Ossandon Busch

in: IWH Discussion Papers, No. 12, 2018

Abstract

Since the global financial crisis, economic literature has highlighted banks’ inclination to bolster up their liquid asset positions once the aggregate interbank funding market experiences a dry-up. To this regard, we show that liquidity hoarding and its detrimental effects on credit can also be triggered by idiosyncratic, i.e. bankspecific, interbank funding shocks with implications for monetary policy. Combining a unique data set of the Brazilian banking sector with a novel identification strategy enables us to overcome previous limitations for studying this phenomenon as a bankspecific event. This strategy further helps us to analyse how disruptions in the bank headquarters’ interbank market can lead to liquidity and lending adjustments at the regional bank branch level. From the perspective of the policy maker, understanding this market-to-market spillover effect is important as local bank branch markets are characterised by market concentration and relationship lending.

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Macroprudential Policy and Intra-group Dynamics: The Effects of Reserve Requirements in Brazil

Chris Becker Matias Ossandon Busch Lena Tonzer

in: IWH Discussion Papers, No. 21, 2017

Abstract

This paper examines whether intra-group dynamics matter for the transmission of macroprudential policy. Using novel bank-level data on the Brazilian banking system, we investigate the effect of reserve requirements targeting headquarter banks’ deposit share on credit supply by their municipal bank branches. For identification purposes, we exploit that reserve requirements are adjusted following global economic cycles. Our results reveal a lending channel of reserve requirements for branches whose parent banks are more exposed to targeted deposits. Branch ownership and exposure to internal liquidity are central in explaining the results. Our findings reveal limitations in current macroprudential policy frameworks.

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Banking Globalization, Local Lending, and Labor Market Effects: Micro-level Evidence from Brazil

Felix Noth Matias Ossandon Busch

in: IWH Discussion Papers, No. 7, 2017

Abstract

This paper estimates the effect of a foreign funding shock to banks in Brazil after the collapse of Lehman Brothers in September 2008. Our robust results show that bank-specific shocks to Brazilian parent banks negatively affected lending by their individual branches and trigger real economic consequences in Brazilian municipalities: More affected regions face restrictions in aggregated credit and show weaker labor market performance in the aftermath which documents the transmission mechanism of the global financial crisis to local labor markets in emerging countries. The results represent relevant information for regulators concerned with the real effects of cross-border liquidity shocks.

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