Foreign banks in transition countries. To whom do they lend and how are they financed?
Ralph De Haas and
Ilko Naaborg (info@naaborgenpartners.nl)
MPRA Paper from University Library of Munich, Germany
Abstract:
We use focused interviews with managers of foreign parent banks and their affiliates in Central Europe and the Baltic States to analyse the small-business lending and internal capital markets of multinational financial institutions. Our approach allows us to complement the standard empirical literature, which has difficulty in analysing important issues such as lending technologies and capital allocation. We find that the acquisition of local banks by foreign banks has not led to a persistent bias in these banks’ credit supply towards large multinational corporations. Instead, increased competition and the improvement of subsidiaries’ lending technologies have led foreign banks to gradually expand into the SME and retail markets. Second, it is demonstrated that local bank affiliates are strongly influenced by the capital allocation and credit steering mechanisms of the parent bank.
Keywords: foreign banks; transition economies; small-business lending; internal capital markets (search for similar items in EconPapers)
JEL-codes: F23 F36 G21 G32 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-ban, nep-eec and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (66)
Published in Financial Markets, Institutions & Instruments 4.15(2006): pp. 159-199
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:6320
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