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Central Bank Transparency and Cross-Border Banking

Listed author(s):
  • Littke, Helge C. N.
  • Eichler, Stefan
  • Tonzer, Lena

We analyze the effect of central bank transparency on cross-border bank activities. Based on a panel gravity model for cross-border bank claims for 21 home and 47 destination countries from 1998 to 2010, we find strong empirical evidence that central bank transparency in the destination country on average increases cross-border claims. Using interaction models, we find that the positive effect of central bank transparency on cross-border claims is only significant if the central bank is politically independent. Central bank transparency and credibility are thus considered as complements by banks investing abroad.

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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2016 (Augsburg): Demographic Change with number 145598.

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Date of creation: 2016
Handle: RePEc:zbw:vfsc16:145598
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