Foreign Banks in Transition Countries: To Whom Do They Lend and How Are They Financed?

Ralph De Haas and Ilko Naaborg

Financial Markets, Institutions & Instruments, 2006, vol. 15, issue 4, 159-199

Abstract: We use focused interviews with managers of foreign parent banks and their affiliates in Central Europe and the Baltic States to analyze 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 analyzing 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 toward 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.

Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/j.1468-0416.2006.00116.x

Related works:
Working Paper: Foreign banks in transition countries. To whom do they lend and how are they financed? (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:finmar:v:15:y:2006:i:4:p:159-199

Access Statistics for this article

More articles in Financial Markets, Institutions & Instruments from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().