Central Bank Transparency and Cross-border Banking

Stefan Eichler, Helge Littke and Lena Tonzer

No 16/2016, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: We analyze the effect of central bank transparency on cross-border bank activities. Based on a panel gravity model for cross-border bank claims for 21 home and 47 destination countries from 1998 to 2010, we find strong empirical evidence that a rise in central bank transparency in the destination country, on average, increases cross-border claims. Using interaction models, we find that the positive effect of central bank transparency on cross-border claims is only significant if the central bank is politically independent. Central bank transparency and credibility are thus considered complements by banks investing abroad.

Keywords: central bank transparency; cross-border banking; gravity model (search for similar items in EconPapers)
JEL-codes: E58 F30 G15 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ban, nep-cba, nep-ifn and nep-mac
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https://www.econstor.eu/bitstream/10419/141306/1/859171205.pdf (application/pdf)

Related works:
Journal Article: Central bank transparency and cross-border banking (2017)
Working Paper: Central Bank Transparency and Cross-Border Banking (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:iwh-16-16

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