Does Interbank Borrowing Reduce Bank Risk?

Valeriya Dinger and Juergen von Hagen ()

No 223, Discussion Papers from SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: In this paper we investigate whether banks that borrow from other banks have lower risk levels. We concentrate on a large sample of Central and Eastern European banks which allows us to explore the impact of interbank lending when exposures are long-term and interbank borrowers are small banks. The results of the empirical analysis generally confirm the hypothesis that long-term interbank exposures result in lower risk of the borrowing banks.

Keywords: interbank market; bank risk; market discipline; transition countries (search for similar items in EconPapers)
JEL-codes: G21 E53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-mac, nep-ore, nep-rmg and nep-tra
Date: Written
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Related works:
Working Paper: Does Interbank Borrowing Reduce Bank Risk? (2008)
Journal Article: Does Interbank Borrowing Reduce Bank Risk? (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:trf:wpaper:223

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