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The Dark and the Bright Side of Global Banking: A (Somewhat) Cautionary Tale from Emerging Europe

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  • Ralph De Haas

    (EBRD, One Exchange Square, London, EC2A 2JN, UK)

Abstract

This paper reviews the literature on the benefits and risks of global banking, with a focus on emerging Europe. It argues that while the potential destabilising impact of global banks was well understood before the recent financial crisis, the sheer magnitude of this impact in the case of systemically relevant foreign bank subsidiaries was under-appreciated. A second lesson from the crisis is that banks’ funding structure, in particular the use of short-term wholesale funding, matters as much for lending stability as does their ownership structure.

Suggested Citation

  • Ralph De Haas, 2014. "The Dark and the Bright Side of Global Banking: A (Somewhat) Cautionary Tale from Emerging Europe," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 56(2), pages 271-282, June.
    • Handle: RePEc:pal:compes:v:56:y:2014:i:2:p:271-282
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    Citations

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    Cited by:

    1. Yildirim, Canan & Efthyvoulou, Georgios, 2018. "Bank value and geographic diversification: regional vs global," Journal of Financial Stability, Elsevier, vol. 36(C), pages 225-245.
    2. Bonin, John & Hasan, Iftekhar & Wachtel, Paul, 2014. "Banking in transition countries," BOFIT Discussion Papers 8/2014, Bank of Finland Institute for Emerging Economies (BOFIT).
    3. Paul Wachtel & Iftekhar Hasan & John Bonin, 2008. "Banking in Transition Countries," Working Papers 08-22, New York University, Leonard N. Stern School of Business, Department of Economics.
    4. Michael A Stemmer, 2017. "Revisiting Finance and Growth in Transition Economies - A Panel Causality Approach," Post-Print halshs-01524462, HAL.
    5. Maria Arakelyan, 2018. "Foreign Banks and Credit Dynamics in CESEE," IMF Working Papers 2018/003, International Monetary Fund.
    6. Chen, Minghua & Wu, Ji & Jeon, Bang Nam & Wang, Rui, 2017. "Do foreign banks take more risk? Evidence from emerging economies," Journal of Banking & Finance, Elsevier, vol. 82(C), pages 20-39.
    7. Nurboja, Bashkim & Košak, Marko, 2017. "Banking efficiency in South East Europe: Evidence for financial crises and the gap between new EU members and candidate countries," Economic Systems, Elsevier, vol. 41(1), pages 122-138.
    8. repec:zbw:bofitp:2014_008 is not listed on IDEAS
    9. Huong, Pham Thu, 2022. "Foreign bank penetration in Vietnam following Vietnam’s accession to the WTO: matching expectations with reality," OSF Preprints fkhbt, Center for Open Science.
    10. Jarko Fidrmuc & Svatopluk Kapounek, 2020. "The Risks and Financial Vulnerability of Foreign Bank Ownership in CEECs: Evidence from Exchange Rate Depreciation after the Financial Crisis," Eastern European Economics, Taylor & Francis Journals, vol. 58(1), pages 34-48, January.
    11. Barthelmess Benedikt & Langlois Jean, 2020. "SME Financing in MENA: A Quantitative and Qualitative Analysis of Multilateral and Bilateral Development Lenders’ Intermediated Lending Practices," Review of Middle East Economics and Finance, De Gruyter, vol. 16(3), pages 1-032, December.
    12. Radu Alin Morutan & Daniel Badulescu, 2016. "State-Owned, Acquisition Or Greenfield Banks In The New Eu Member States. A Post-Crisis Analysis," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 62-71, September.
    13. Paul Wachtel & Iftekhar Hasan & John Bonin, 2008. "Banking in Transition Countries," Working Papers 08-22, New York University, Leonard N. Stern School of Business, Department of Economics.
    14. Wu, Ji & Chen, Minghua & Jeon, Bang Nam & Wang, Rui, 2017. "Does foreign bank penetration affect the risk of domestic banks? Evidence from emerging economies," Journal of Financial Stability, Elsevier, vol. 31(C), pages 45-61.
    15. Hoffmann, Andreas, 2016. "The collateral effects of political integration on credit growth in the new member states of the EU," Economic Systems, Elsevier, vol. 40(4), pages 658-669.
    16. Benedikt Barthelmess & Jean Langlois-Berthelot, 2019. "SME Financing in MENA," Post-Print hal-03700216, HAL.

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