Foreign-Owned Banks and Host Economies
|Author:||Mgr. Tereza Fišerová|
|Year:||2013 - summer|
|Leaders:|| doc. PhDr. Petr Teplý Ph.D.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:||M.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance.|
|Abstract:||In the past two decades, significant changes have been shaping and
transforming the banking sectors worldwide. Among these trends we find an
intensive surge in foreign bank ownership which is especially remarkable in the
countries of the Central, Eastern and South-Eastern European region. Using the
sample of 17 countries and filtering out more than 140 domestically-operating
foreign-owned banks, we examine the determinants of their performance in
relation to host country conditions and home country banking sector
performance over the period of seven years between 2005 and 2011. Due to the
topic’s currency, we additionally provide an insight into the link between
sovereign debt and bank ownership. By means of system GMM model, or fixed
effects model, we reveal that macroeconomic fundamentals of the host country
affect the foreign-owned banks’ performance but do not suffice in explaining it
fully. Moreover, the depth of the current crisis as demonstrated in the home
country impacts negatively on the host-country-operating foreign-owned banks.
We did not find any convincing evidence of the host sovereign debt and bank
ownership nature of relationship.