Foreign Banks: Trends, Impact and Financial Stability

January 1, 2012

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Neeltje van Horen, and Stijn Claessens. Foreign Banks: Trends, Impact and Financial Stability, (USA: International Monetary Fund, 2012) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper introduces a comprehensive database on bank ownership for 137 countries over 1995-2009, and reviews foreign bank behavior and impact. It documents substantial increases in foreign bank presence, with many more home and host countries. Current market shares of foreign banks average 20 percent in OECD countries and 50 percent elsewhere. Foreign banks have higher capital and more liquidity, but lower profitability than domestic banks do. Only in developing countries is foreign bank presence negatively related with domestic credit creation. During the global crisis foreign banks reduced credit more compared to domestic banks, except when they dominated the host banking systems.

Subject: Bank credit, Banking, Commercial banks, Credit, Emerging and frontier financial markets, Financial institutions, Financial markets, Financial sector development, Foreign banks, Money

Keywords: Asia and Pacific, Bank, Bank characteristic, Bilateral investment, Central and Eastern Europe, Commercial banks, Credit, Cross-border banking, Domestic bank, Emerging and frontier financial markets, Emerging market banks, Financial crisis, Financial globalization, Financial sector development, Financial stability, Foreign bank, Foreign banks, Foreign direct investment, Global, Investment activity, Lending, Middle East, Parent bank, Providing emerging market banks incentive, South Asia, Spillovers, WP

Publication Details

Pages:

40
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/010
Stock No:

WPIEA2012010
ISBN:

9781463931155
ISSN:

1018-5941

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