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Changes in bank specialisation: comparing foreign subsidiaries and branches in Luxembourg

Claudia Curi (), Paolo Guarda and Valentin Zelenyuk

No 67, BCL working papers from Central Bank of Luxembourg

Abstract: Presumably, foreign banks open subsidiaries and branches in Luxembourg to perform different tasks. This paper studies the balance sheet structure of banks in Luxembourg, testing for differences across groups and across periods. Non-parametric methods yield several findings. First, specialisation and heterogeneity vary across years as well as across different market segments. Second, comparing subsidiaries and branches, estimated distributions across banks have been relatively similar for Interbank Loans but have become rather different for Interbank Deposits. For Customer Loans and Customer Deposits, the differences across groups are generally greater, especially for Customer Deposits. Third, in 2009 the financial crisis generally sharpened the differences between subsidiaries and branches for all variables considered. Fourth, long-term changes between 1995 and 2007 appeared to be (temporarily?) reversed between 2007 and 2009 by the financial crisis.

Keywords: Luxembourg Banks; Banking activities; Convergence; Distribution Dynamics; Non-Parametric kernel (search for similar items in EconPapers)
JEL-codes: C14 G21 D30 (search for similar items in EconPapers)
Date: 2011-10
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