Information or Regulation: What Is Driving the International Activities of Commercial Banks?
AbstractInformation costs and regulatory barriers are the main distinguishing features of international financial markets as compared to national financial markets. This paper presents a simple model of the impact of these factors on banksÂ’ cross-border activities and provides empirical evidence. Our dataset allows us to capture both the times-series and the cross-section dimension of information costs and changes in regulations, in particular, for intra-EU asset holdings. While EU membership per se seems to have had a negative impact on cross-border banking activities, the adoption of the Single Market clearly had a positive impact. While regulations and information costs are important for all reporting countries, their relative importance differs between countries.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1011.
Length: 51 pages
Date of creation: Nov 2000
Date of revision:
cross-border banking; information costs; panel cointegration;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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