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Using country-level panel data over 1995–2013 on within-country income inequality and foreign bank presence, this paper establishes a positive relation between the two, running from higher foreign bank presence to income inequality. Given that foreign bank participation increased by 62% over the period 1995 to 2013, our baseline results imply a 5.8% increase in the Gini coefficient on average over this period, ceteris paribus. These results are robust to the inclusion of country and year fixed effects and to the use of restrictions on foreign bank entry in the host countries as an instrumental variable. We show that this positive effect is channelled through the lack of greenfield entry and the associated lower levels of competition. [ABSTRACT FROM AUTHOR]

The deregulation of the financial markets and their progressive globalization has favoured the internationalization of banking. Moreover, during the international financial crisis, the presence of foreign banks has increased in countries experiencing faster economic growth, such as Brazil. In this context, the aim of this study is to analyze the growth and profitability of the financial institutions in Brazil, taking into account the possible non-linearity of the relationship, the differences between Brazilian and foreign institutions and the effect of the crisis. Our results indicate that the entry of foreign institutions has a direct effect on the Brazilian banking industry. [ABSTRACT FROM AUTHOR]

This paper investigates the main features of the relationships between banks and non-financial firms in Italy. Based on detailed firm-level data, we analyse the role of firm-level characteristics, decision-making factors and local credit market indicators in shaping various aspects of corporate banking choices. Empirical results show that young and small firms have a higher probability of relationships with local banks, confirming the advantage of local credit institutions in dealing with informationally opaque firms. Large and internationally active firms tend to establish relationships with national and foreign banks, as they are able to provide more complex banking services that are crucial to access foreign markets. Moreover, firms that are more dependent on external financing are more likely to use multiple and differentiated banking relationships, as a way to diversify external financing sources and alleviate credit constraints. [ABSTRACT FROM AUTHOR]

This article investigates the impact of bank-specific, market-specific and macroeconomic factors on the profitability of the banking sector in Serbia in the period 2004–2011. We use three panel datasets: for all banks in a sample and for domestic and foreign banks. The Hausman test was performed in order to test whether a fixed or a random effects model should be used in the regression analysis. The results are compared to the findings of previous research which was focused on EU countries. Moreover, the crisis effect on the profitability of banks in Serbia has been considered. The results show that bank-specific and market-specific factors have influence on bank profitability, but macroeconomic factors do not. We find that influence of liquidity ratio and a measure of financial development on profitability of banks are in contrast in Serbia compared to EU countries. The results also show that different factors influence profitability of domestic and foreign banks and that crisis has an opposite effect on profitability of domestic and foreign banks. [ABSTRACT FROM PUBLISHER]

This article examines the impact of foreign banks on the monetary policy transmission mechanism in the Korean economy during the period from 2000 to 2012, with a specific focus on the lending behavior of banks with different types of ownership. Using bank-level panel data of the banking system in Korea, we present consistent evidence on the buffering impact that the foreign banks, especially foreign bank branches including US bank branches, on the effectiveness of the monetary policy transmission mechanism in Korea from the bank-lending channel perspective during the global financial crisis of 2008–2009. [ABSTRACT FROM AUTHOR]

He C. and Yeung G. The locational distribution of foreign banks in China: a disaggregated analysis, Regional Studies. This paper examines the location choices made by foreign banks of different organizational form and size in China. Results from the conditional logit models suggest smaller foreign banks tend to pursue the 'follow-the-customer' strategy, while larger banks are likely to use the 'follow-the-competitor' strategy in China. The agglomeration effect is more important than the first-mover cities as a determinant of the location choices make by foreign banks in China. This finding could be partially explained by the location-bounded institutional variables that are unable to be fully reconciled with the recent deregulation policies. [image omitted] He C. et Yeung G. La distribution geographique des banques etrangeres en Chine: une analyse desagregee, Regional Studies. La presente etude cherche a analyser le choix d'emplacement des banques etrangeres en Chine en fonction de leur structure organisationnelle et de leur taille differentes. Les resultats provenant des modeles logit conditionnels laissent supposer qu'en Chine les plus petites banques etrangeres ont tendance a poursuivre la strategie de 'suivre le client', alors que les plus grandes banques sont plus susceptibles d'adopter la strategie de 'suivre le concurrent'. L'effet d'agglomeration s'avere plus important que ne l'est le phenomene du premier arrive dans les grandes villes comme determinant des choix d'emplacement des banques etrangeres en Chine. Ce resultat pourrait, du moins en partie, s'expliquer par des variables institutionnelles qui sont delimitees geographiquement et qui ne peuvent pas etre conciliees avec les politiques recentes de dereglementation. Banques etrangeres Choix d'emplacement Modele logit conditionnel Chine He C. und Yeung G. Verteilung der Standorte auslandischer Banken in China: eine disaggregierte Analyse, Regional Studies. In diesem Beitrag werden die Standortentscheidungen auslandischer Banken verschiedener Organisationsformen und Grossen in China untersucht. Aus den Ergebnissen konditionaler Logit-Modelle geht hervor, dass kleinere auslandische Banken in China meist eine Strategie des 'Dem-Kunden-Folgens' wahlen, wahrend grossere Banken meist auf eine Strategie des 'Der-Konkurrenz-Folgens' setzen. Der Agglomerationseffekt spielt als Determinant fur die Standortentscheidungen auslandischer Banken in China eine grossere Rolle als die Pionierstadte. Dieses Ergebnis lasst sich teilweise durch die standortgebundenen institutionellen Variablen erklaren, die sich nicht vollstandig mit den aktuellen Deregulationspolitiken in Einklang bringen lassen. Auslandische Banken Standortentscheidungen Konditionales Logit-Modell China He C. y Yeung G. La distribucion de ubicacion de los bancos extranjeros en China: un analisis desglosado, Regional Studies. En este articulo analizamos las decisiones de ubicacion tomadas por bancos extranjeros de diferentes formas de organizacion y tamanos en China. Los resultados de los modelos logit condicionales indican que en China los bancos extranjeros mas pequenos tienden a optar por la estrategia de 'seguir al cliente' mientras que los bancos mas grandes tienden a usar la estrategia de 'seguir a la competencia'. El efecto de aglomeracion desempena un papel mas importante que el de las ciudades pioneras para determinar las decisiones de ubicacion que realizan los bancos extranjeros en China. Estos resultados podrian explicarse en parte por las variables institucionales vinculadas a la ubicacion que no pueden reconciliarse totalmente con las recientes politicas de desregulacion. Bancos extranjeros Decisiones de ubicacion Modelo logit condicional China [ABSTRACT FROM AUTHOR]

The article presents the study conducted by two Beijing-based economic geographers concerning the local financial systems in China. The study analyzes the most recently available 2006 regional data on exogenous and endogenous banks, highlighting the differences between the country's coastal and the lagging rural provinces in the country's central and western macroregions. It also examines the geographic distribution of bank branches and assets in Shanghai, the country's traditional financial center, which has attracted the bulk of foreign-owned banks and financial service providers seeking entry in Chinese market.

This paper examines whether a large geopolitical event, such as the war in Iraq, can affect foreign bank lending from developed countries to emerging markets. Using country-level data, the paper analyzes the effects of economic shocks and the Iraq war on the availability of foreign bank credit to five countries in the Middle East and North Africa. The war has had a nonuniform effect on foreign banks: Although the war has led to higher U.S. lending, it has also discouraged British and Italian banks from lending to the region. Implications concerning the stability and reliability of foreign bank credit in the face of increased geopolitical risks are identified and discussed. [ABSTRACT FROM AUTHOR]

An orthodox currency board (CB) renders central banking redundant for interest and exchange rate determination. Thereby, monetary policy is de facto outsourced. Foreign direct investment (FDI) in banking can lead to outsourcing of the second important central bank function, responsibility for banking supervision. Economic and political conditions for outsourcing of central banking are discussed. Estonia’s experience with a CB and expanding foreign involvement in banking is reviewed. The Argentine CB experience is discussed briefly to provide a contrast. The conclusion outlines the conditions for successful currency outsourcing to another country or regional authority. [ABSTRACT FROM AUTHOR]

The dramatic increase in multinational banks in the late 1990s is a direct result of Washington Consensus-type policies that emphasize the removal of barriers to the free flow of financial capital. In Latin America, foreign banks now control almost half of the total banking activity. Inevitably, the direct implication of such circumstances is a fall in the profits of domestic banks. In response to this, domestic banks react by curtailing their overall lending in the short run, thereby preventing small borrowers from accession to credit, and eventually increasing their lending to riskier projects and borrowers in the medium run. Either way, the multinationalization of the banking system in emerging markets will tend to increase the fragility of the overall system rather than decrease it. Evidence of both scenarios has been reported. Adopting an endogenous money approach, the authors advocate policies that, although recognizing that deregulation and liberalization may be difficult to stop, would, nonetheless, address some of the more contentious consequences of multinational banking. [ABSTRACT FROM AUTHOR]