Click here for search results
Is the financial safety net a barrier to cross-border banking ?, Volume 1
 
Author:Bertay, Ata Can; Demirguc-Kunt Asli; Huizinga, Harry; Country:World;
Date Stored:2012/01/17Document Date:2012/01/01
Document Type:Policy Research Working PaperSubTopics:Access to Finance; Emerging Markets; Economic Theory & Research; Banks & Banking Reform; Debt Markets
Language:EnglishRegion:The World Region
Report Number:WPS5947Collection Title:Policy Research working paper ; no. WPS 5947
Volume No:1  

Summary: A bank's interest expenses rise with its degree of internationalization, measured by its share of foreign liabilities in total liabilities or a Herfindahl index of international liability concentration, especially if the bank is performing badly. The results in this paper suggest that an international bank's cost of funds raised through a foreign subsidiary is 1.5-2.4 percent higher than the cost of funds for a purely domestic bank. That is a sizeable difference, given that the overall mean cost of funds is 3.3 percent. These results can be explained by limited incentives for national authorities to bail out an international bank, as well as an inefficient recovery and resolution process for international banks. In any event, a less reliable financial safety net appears to be a barrier to cross-border banking.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 62 pagesOfficial version*4.34 (approx.)
TextText version**
How To Order

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/0J6IPSQ800