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Does Interbank Borrowing Reduce Bank Risk?

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  • VALERIYA DINGER
  • JÜRGEN VON HAGEN

Abstract

In this paper we investigate whether banks that borrow from other banks have lower risk levels. We concentrate on a large sample of Central and Eastern European banks that allows us to explore the impact of interbank lending when exposures are long term and interbank borrowers are small banks. The results of the empirical analysis generally confirm the hypothesis that long-term interbank exposures result in lower risk of the borrowing banks. Copyright (c) 2009 The Ohio State University.

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Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.

Volume (Year): 41 (2009)
Issue (Month): 2-3 (03)
Pages: 491-506

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Handle: RePEc:mcb:jmoncb:v:41:y:2009:i:2-3:p:491-506

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Citations

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Cited by:
  1. Itai Agur, 2014. "Bank Risk Within and Across Equilibria," IMF Working Papers 14/116, International Monetary Fund.
  2. Craig, B.R. & Dinger, V., 2010. "Deposit Market Competition, Wholesale Funding, and Bank Risk," Discussion Paper 2010-65S, Tilburg University, Center for Economic Research.
  3. Andrievskaya, Irina & Semenova , Maria, 2013. "Market discipline and the Russian interbank market," BOFIT Discussion Papers 29/2013, Bank of Finland, Institute for Economies in Transition.
  4. Distinguin, Isabelle & Kouassi, Tchudjane & Tarazi, Amine, 2013. "Interbank deposits and market discipline: Evidence from Central and Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 544-560.
  5. Affinito, Massimiliano, 2012. "Do interbank customer relationships exist? And how did they function in the crisis? Learning from Italy," Journal of Banking & Finance, Elsevier, vol. 36(12), pages 3163-3184.
  6. Inoguchi, Masahiro, 2013. "Interbank market, stock market, and bank performance in East Asia," Pacific-Basin Finance Journal, Elsevier, vol. 25(C), pages 136-156.
  7. Mamiza Haq & Amine Tarazi & Necmi Avkiran & Ana Rosa Fonceca, 2013. "Market Discipline and Bank Charter Value: The Case of Two Safe Banking Industries," Working Papers hal-00955135, HAL.
  8. Massimiliano Affinito, 2013. "Central bank refinancing, interbank markets, and the hypothesis of liquidity hoarding: evidence from a euro-area banking system," Temi di discussione (Economic working papers) 928, Bank of Italy, Economic Research and International Relations Area.
  9. Affinito, Massimiliano, 2013. "Central bank refinancing, interbank markets and the hypothesis of liquidity hoarding: evidence from a euro-area banking system," Working Paper Series 1607, European Central Bank.
  10. Jacopo Cimadomo & Sebastian Hauptmeier & Tom Zimmermann, 2012. "Fiscal Consolidations and Banking Stability," Working Papers 2012-32, CEPII research center.
  11. Carrera, Cesar & Vega, Hugo, 2012. "Interbank Market and Macroprudential Tools in a DSGE Model," Working Papers 2012-014, Banco Central de Reserva del Perú.
  12. Massimiliano Affinito, 2011. "Do interbank customer relationships exist? And how did they function in the crisis? Learning from Italy," Temi di discussione (Economic working papers) 826, Bank of Italy, Economic Research and International Relations Area.
  13. Dragoş Ilie, 2012. "Sustainability and Organizational Change by Sustainable Crediting Therapy," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(32), pages 393-403, June.

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