Foreign Bank Penetration and Private Sector Credit in Central and Eastern Europe

Ralph de Haas and Iman Lelyveld
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Ralph de Haas: De Nederlandsche Bank

International Finance from University Library of Munich, Germany

Abstract: We analyse foreign bank penetration in Central and Eastern Europe (CEE)and its influence on private sector credit,taking into account both cross-border credit and credit by foreign bank subsidiaries. By combining BIS and BankScope data into a unique database we make a clear distinction between these credit categories.We show that the relative importance of foreign bank subsidiaries has increased considerably during recent years.However,in Hungary and Poland foreign banks were also important during the first transition years,as they provided substantial amounts of cross-border credit.We do not find evidence of foreign banks deserting CEE during financial crises or economic downturns.Although cross-border credit did decrease during some periods,foreign banks expanded the credit supply of their subsidiaries simultaneously.This may be an important consideration for (transition)countries that still have to decide whether to open up their markets to foreign bank subsidiaries.

Keywords: foreign banks; cross-border credit; transition economies (search for similar items in EconPapers)
JEL-codes: F36 G21 (search for similar items in EconPapers)
Date: 2002-09-16
New Economics Papers: this item is included in nep-eec and nep-ifn
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Foreign Bank Penetration and Private Sector Credit in Central and Eastern Europe (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpif:0209002

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