Foreign Banks in Emerging Market Crises: Evidence From Malaysia
IMF Working Papers, July 1, 2004
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- Foreign Banks in Emerging Market Crises: Evidence From Malaysia
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Bibliographic details
- Authors: Enrica Detragiache, Poonam Gupta
- Published: July 1, 2004
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451855142.001
Summary and key findings
- Foreign banks have greatly increased their presence in emerging market countries in recent years.
- The paper compares the performance of domestic banks and a long-established group of foreign banks during the recent crisis in Malaysia.
- The sharpest differences are between banks mainly active in Asia (including all domestic and some foreign banks) and foreign banks not specialized in Asia.
- Foreign banks not specialized in Asia performed better than the rest during the crisis, maintaining higher profitability thanks to:
- higher interest margins
- lower nonperforming loans
- Foreign banks did not abandon the local market during the crisis.
- Foreign banks received less government support than domestic institutions.
Subjects and keywords
- Subject: Banking, Banking crises, Commercial banks, Financial crises, Financial institutions, Foreign banks, Loans, Nonperforming loans
- Keywords: Asia and Pacific, Asia-oriented, bank, bank assets, bank Bumiputra, bank characteristic, bank closure, bank dummy, bank Negara Malaysia, bank performance, bank rescue, banking crises, Commercial banks, crisis, Emerging market banks, foreign banks, Loans, Nonperforming loans, parent bank, WP