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How Important Are Foreign Banks in European Transition Countries? A Comparative Analysis

Hanneke Bol, Jakob de Haan (), Bert Scholtens () and Ralph de Haas
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Hanneke Bol: University of Groningen
Ralph de Haas: De Nederlandsche Bank

Authors registered in the RePEc Author Service: Ilko Naaborg ()

International Finance from University Library of Munich, Germany

Abstract: This paper analyses the development of the banking sector in twelve transition countries. Foreign banks have become major players in the financial system of these countries. Still, foreign bank presence and financial development in general vary considerably between these economies. Distance from the home country is an important determinant for a foreign bank to enter a specific country. The most frequently used mode of entry is buying (part) of a domestic bank. This share is gradually expanded until a majority share is held. It turns out that foreign banks have, in general, higher profitability and efficiency levels than domestic banks.

Keywords: Comparative Financial Systems; Financial Markets; Financial Institutions; Financial Development; Transition Economies. (search for similar items in EconPapers)
JEL-codes: F36 G15 G20 O16 P34 (search for similar items in EconPapers)
Date: 2002-09-22
Note: Type of Document - Word; prepared on PC; to print on HP;
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