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Foreign banks and the stability of foreign and domestic credit in CEECs

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  • Sophie Brana

    (Larefi - Laboratoire d'analyse et de recherche en économie et finance internationales - UB - Université de Bordeaux)

  • Delphine Lahet

    (Larefi - Laboratoire d'analyse et de recherche en économie et finance internationales - UB - Université de Bordeaux)

Abstract

The huge presence of foreign banks in CEECs leads to a strong dependence to banking foreign claims. They may be cross-border claims or claims of foreign subsidiaries located in the host country. Are foreign banks a factor that attracts foreign claims in the host country? Does their presence stabilize banking foreign flows and in fine the domestic credit supply? Using a Push&Pull framework, we adopt a macroeconomic point of view by using balance of payments data concerning banking foreign financing on all sectors in CEECs. Tests with panel data show that the presence of foreign banks is a substitute for banking foreign loans and is not a factor of their stability. Nevertheless, it has a stabilizing role on the domestic credit.

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  • Sophie Brana & Delphine Lahet, 2011. "Foreign banks and the stability of foreign and domestic credit in CEECs," Working Papers hal-00637686, HAL.
    • Handle: RePEc:hal:wpaper:hal-00637686
    Note: View the original document on HAL open archive server: https://hal.science/hal-00637686v2
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    References listed on IDEAS

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    Cited by:

    1. Jarko Fidrmuc & Svatopluk Kapounek, 2020. "The Risks and Financial Vulnerability of Foreign Bank Ownership in CEECs: Evidence from Exchange Rate Depreciation after the Financial Crisis," Eastern European Economics, Taylor & Francis Journals, vol. 58(1), pages 34-48, January.

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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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