Do foreign-owned banks affect banking system liquidity risk?
نویسنده
چکیده
Dinger, Valeriya—Do foreign-owned banks affect banking system liquidity risk? Existing empirical research shows that foreign-owned banks play a stabilizing role in emerging economies’ banking systems. Anecdotal evidence suggests that this stabilizing role can be attributed to transnational banks’ access to more diversified sources of liquidity. There exists, however, no empirical evidence so far on transnational banks’ liquidity behavior and its effect on aggregate banking system liquidity. This paper aims at closing this gap. First, we look at the liquid assets holdings of transnational banks and show that in ‘‘normal” times they are significantly lower but in crises times higher than those of single-market banks. Second, we find evidence that transnational banks’ presence significantly reduces the risk of aggregate liquidity shortages in emerging economies. Journal of Comparative Economics 37 (4) (2009) 647–657. University of Bonn, Lennestr. 37, 53113 Bonn, Germany. 2009 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.
منابع مشابه
Bank regulation and financial fragility in developing countries: Does bank structure matter? ¬リニ
Using data for 1238 banks located in 94 developing and emerging countries, we explore whether the impact of bank regulation and supervision on banking risk (measured by the banks’ Z-scores) depends on bank structure. Our findings suggest that stricter regulation and supervision increases the banks’ Z-scores. Notably capital requirements and supervisory control diminish banking risk. However, th...
متن کاملEffects Of Risk Parameters (Credit, Operational, Liquidity And Market Risk) On Banking System Efficiency (Studying 15 Top Banks In Iran)
متن کامل
Measuring Systemic Funding Liquidity Risk in the Interbank Foreign Currency Lending Market
This paper proposes a new framework which captures the systemic nature of funding liquidity risk. Using this framework we develop a set of indicators which measure different aspects of the systemic funding liquidity risk in the interbank foreign currency lending market: (i) systemic funding liquidity needs, (ii) systemic vulnerability, (iii) systemic importance and (iv) systemic liquidity short...
متن کاملThe Role of Regulation in Banking: Liquidity Risk Perspective
The liquidity crisis in 2008 sparked interest in the role of regulation that could promote resilience and stability in the banking system. While the Public Interest theory suggests that legal policies could discipline banking activities, the Private Interest theory predicts otherwise, which impairs banking performance. The conflicting theories warrant comprehensive research, especially for Isla...
متن کاملInvestment Following a Financial Crisis: Does Foreign Ownership Matter?
We investigate whether foreign ownership shields firms from liquidity constraints following a financial crisis. Recent crises in East Asia, Latin America, and Russia have been characterized both by large currency devaluations and widespread collapse of the banking sector. Although a currency devaluation should increase exporters’ competitiveness and investment, a collapsing banking system may d...
متن کامل