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International banking facilities and bank value

Author

Listed:
  • Charles Braymen

    (Creighton University)

  • John R. Wingender

    (Creighton University)

Abstract

This study examines the value creation and destruction associated with the implementation of International Banking Facilities (IBFs) by publicly-traded US banks. Overall, we find that the implementation of an IBF negatively impacts bank value. However, our further results suggest that value creation or destruction varies across interest rate regimes. IBF implementation is more likely to be value creating during increasing-rate environments, but value destroying during decreasing-rate environments. Our results also suggest that banks with foreign branches see higher levels of value creation. Lastly, while systematic risk does not increase for IBF-implementing banks, there is an increase in overall risk.

Suggested Citation

  • Charles Braymen & John R. Wingender, 2023. "International banking facilities and bank value," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 37(4), pages 351-377, December.
    • Handle: RePEc:kap:fmktpm:v:37:y:2023:i:4:d:10.1007_s11408-023-00436-z
    DOI: 10.1007/s11408-023-00436-z
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    More about this item

    Keywords

    International banking facilities; Event study; Internationalization; Deregulation;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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