Foreign Bank Penetration and Bank Credit Stability in Central and Eastern Europe
AbstractWe analyse the development of foreign bank penetration in Central and Eastern Europe (CEE) and its influence on the stability of bank credit. We measure both cross-border credit and activities of foreign bank subsidiaries within CEE. By combining BIS statistics and BankScope data into a unique database we are able to make a clear distinction between these two kinds of activities. Our analysis shows that the relative importance of foreign bank subsidiaries in CEE has increased considerably during recent years. However, in Estonia, Hungary and Poland foreign banks were also important during the first transition years, as they provided substantial amounts of cross-border credit. We do not find evidence of foreign banks deserting CEE, e.g. during adverse economic times. Although cross-border credit did decrease during some periods, our results show that foreign banks acquired new local subsidiaries or expanded the credit supply of existing subsidiaries at the same time.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Netherlands Central Bank, Directorate Supervision in its series Research Series Supervision (discontinued) with number 43.
Date of creation: Mar 2002
Date of revision:
foreign banks; cross-border credit; transition economies; financial stability;
Find related papers by JEL classification:
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-CFN-2003-07-13 (Corporate Finance)
- NEP-EEC-2003-07-13 (European Economics)
- NEP-MFD-2003-07-13 (Microfinance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peek, Joe & Rosengren, Eric S, 1997.
"The International Transmission of Financial Shocks: The Case of Japan,"
American Economic Review,
American Economic Association, vol. 87(4), pages 495-505, September.
- Joe Peek & Eric S. Rosengren, 1996. "The International Transmission of Financial Shocks: The Case of Japan," Boston College Working Papers in Economics 357, Boston College Department of Economics.
- Joe Peek & Eric S. Rosengren, 1996. "The international transmission of financial shocks: the case of Japan," Working Papers 96-1, Federal Reserve Bank of Boston.
- Jennifer S. Crystal & B. Gerard Dages & Linda S. Goldberg, 2002. "Has foreign bank entry led to sounder banks in Latin America?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, issue Jan.
- Claessens, Stijn & Demirguc-Kunt, Asli & Huizinga, Harry, 1998. "How does foreign entry affect the domestic banking market?," Policy Research Working Paper Series 1918, The World Bank.
- Linda Goldberg & B. Gerard Dages & Daniel Kinney, 2000.
"Foreign and Domestic Bank Participation in Emerging Markets: Lessons from Mexico and Argentina,"
NBER Working Papers
7714, National Bureau of Economic Research, Inc.
- B. Gerard Dages & Linda Goldberg & Daniel Kinney, 2000. "Foreign and domestic bank participation in emerging markets: lessons from Mexico and Argentina," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 17-36.
- Nancy L. Wagner & Dora M. Iakova, 2001. "Financial Sector Evolution in the Central European Economies:Challenges in Supporting Macroeconomic Stability and Sustainable Growth," IMF Working Papers 01/141, International Monetary Fund.
- Fernando J. Cardim de Carvalho, 2000.
"New competitive strategies of foreign banks in large emerging economies: the case of Brazil,"
Banca Nazionale del Lavoro Quarterly Review,
Banca Nazionale del Lavoro, vol. 53(213), pages 135-169.
- Fernando J. Cardim de Carvalho, 2000. "New competitive strategies of foreign banks in large emerging economies: the case of Brazil," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(213), pages 135-169.
- Cludia M. Buch, 1997. "Opening up for foreign banks: How Central and Eastern Europe can benefit," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(2), pages 339-366, November.
- McKinnon, Ronald I & Pill, Huw, 1997. "Credible Economic Liberalizations and Overborrowing," American Economic Review, American Economic Association, vol. 87(2), pages 189-93, May.
- Hanneke Bol & Jakob de Haan & Bert Scholtens & Ralph de Haas, 2002. "How Important Are Foreign Banks in European Transition Countries? A Comparative Analysis," International Finance 0209005, EconWPA.
- Ilko Naaborg & Bert Scholtens & Jakob de Haan & Hanneke Bol & Ralph de Haas, 2003. "How Important are Foreign Banks in the Financial Development of European Transition Countries?," CESifo Working Paper Series 1100, CESifo Group Munich.
- H. Brouwer & R. de Haas & B. Kiviet, 2002. "Banking sector development and financial stability in the run up to EU accession," MEB Series (discontinued) 2002-6, Netherlands Central Bank, Monetary and Economic Policy Department.
- J.W.B. Bos, 2003. "Improving Market Power Tests: Does it matter for the Dutch Banking Market?," Research Series Supervision (discontinued) 56, Netherlands Central Bank, Directorate Supervision.
- Henk Brouwer & Ralph de Haas & Bas Kiviet, 2002. "Banking sector development and financial stability in the run up to EU accession," Macroeconomics 0209003, EconWPA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rob Vet).
If references are entirely missing, you can add them using this form.