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Assets or liabilities? The politics of bank ownership

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  • Rachel A. Epstein

Abstract

By 2014, there was significant variation across the global economy in the levels of domestic and foreign bank ownership among states. While major emerging and most advanced countries continued to protect domestic control over the bulk of their banking assets, a number of developing and transition economies had opened their banking markets to unprecedentedly high levels of foreign bank ownership. This introduction to a special issue on the politics of bank ownership examines why states have taken such divergent paths, and maps out some of the major consequences of disparate foreign bank ownership levels. The special issue finds that banking sector protectionism against a backdrop of globalization has generated new conflicts and costs for states. Paradoxically, it is the large, powerful countries that are most susceptible to such costs and conflict, in contrast to their more open, if weaker, counterparts. In addition, we find that high levels of foreign bank ownership have not resulted in significant vulnerability for host states, as some scholars had predicted. In some cases, foreign bank ownership can even improve a weak state's power position. Finally, we conclude that states' varying approaches to banking sector protectionism and openness complicate efforts to supranationalize bank regulation and supervision, exacerbating financial instability.

Suggested Citation

  • Rachel A. Epstein, 2014. "Assets or liabilities? The politics of bank ownership," Review of International Political Economy, Taylor & Francis Journals, vol. 21(4), pages 765-789, August.
  • Handle: RePEc:taf:rripxx:v:21:y:2014:i:4:p:765-789
    DOI: 10.1080/09692290.2014.912990
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    References listed on IDEAS

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    Cited by:

    1. Young Kevin, 2014. "The complex and covert web of financial protectionism," Business and Politics, De Gruyter, vol. 16(4), pages 1-35, December.
    2. Bulfone, Fabio, 2020. "The political economy of industrial policy in the European Union," MPIfG Discussion Paper 20/12, Max Planck Institute for the Study of Societies.
    3. Lucia Quaglia & David Howarth & Moritz Liebe, 2016. "The Political Economy of European Capital Markets Union," Journal of Common Market Studies, Wiley Blackwell, vol. 54, pages 185-203, September.
    4. Lucia Quaglia & Aneta Spendzharova, 2017. "Post‐crisis reforms in banking: Regulators at the interface between domestic and international governance," Regulation & Governance, John Wiley & Sons, vol. 11(4), pages 422-437, December.
    5. Rammal, Hussain G. & Rose, Elizabeth L. & Ghauri, Pervez N. & Ørberg Jensen, Peter D. & Kipping, Matthias & Petersen, Bent & Scerri, Moira, 2022. "Economic nationalism and internationalization of services: Review and research agenda," Journal of World Business, Elsevier, vol. 57(3).

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