How does foreign entry affect the domestic banking market?

  • 13 Pages
  • 3.98 MB
  • 1682 Downloads
  • English
by
World Bank, East Asia and Pacific Region and Development Research Group , Washington, DC
Banks and banking -- Developing countries., Banks and banking, Foreign -- Developing count

Places

Developing count

StatementStijn Claessens, Aslı Demirgüç-Kunt, and Harry Huizinga.
SeriesPolicy research working paper ;, 1918, Policy research working papers ;, 1918.
ContributionsDemirgüç-Kunt, Aslı, 1961-, Huizinga, Harry., World Bank. East Asia and Pacific Regional Office., World Bank. Development Research Group.
Classifications
LC ClassificationsHG3881.5.W57 P63 no. 1918
The Physical Object
Pagination13 p. ;
ID Numbers
Open LibraryOL464679M
LC Control Number98184507

First, we document the extent of foreign bank presence in national banking environments. Table 1 presents two measures of foreign bank presence: the share of the number of banks that are foreign-owned, and the share of foreign bank assets in total bank assets.

The number presence measure is an appropriate measure, if the number of domestic and foreign banks determines Cited by: How does foreign entry affect the domestic banking market. (English) Abstract. Banking markets are becoming increasingly international through financial liberalization and general economic integration.

Using bank-level data for 80 countries forthe authors examine the extent of foreign ownership in national banking markets Cited by: premise that the gains from foreign entry to the domestic banking system outweigh any losses. Several authors have addressed the potential benefits of foreign bank entry for the domestic economy in terms of better resource allocation and higher efficiency (see Levine (), Walter and Gray (), and Gelb and Sagari ()).

Levine (). June Does the entry of foreign banks make domestic banks more competitive. This study shows that, in developing countries, increasing the number (even more than the share) of foreign banks reduces both profits and overhead expenses of domestic banks.

How Does Foreign Entry Affect the Domestic Banking Market. Stijn Claessens, Asli Demirgüç-Kunt, and Harry How does foreign entry affect the domestic banking market? book Revised: May Abstract: Using bank level data for 80 countries in the period, this paper examines the extent of.

It is common to read, in the literature on foreign banking, that the entry of foreign banks can make national banking markets more competitive, thereby forcing domestic banks to operate more. How Does Foreign Bank Entry Affect Domestic Banking Markets Article in Journal of Banking & Finance 25(5) February with Reads How we measure 'reads'.

In industrial countries it is the domestic banks that have greater profits, higher interest margins, and higher tax payments. It is common to read, in the literature on foreign banking, that the entry of foreign banks can make national banking markets more competitive, thereby forcing domestic banks to operate more efficiently.

Downloadable (with restrictions). Banking markets are becoming increasingly international through financial liberalization and general economic integration.

Using bank-level data for 80 countries forthe authors examine the extent of foreign ownership in national banking markets. They compare net interest margins, overhead, taxes paid, and profitability of foreign.

The channels via which foreign banks affect domestic ones may be de facto intertwined with each other, i.e., the “cherry-pick” associated with foreign entry may also encourage more fierce market competition. Unfortunately, it is empirically difficult to distinguish the clear-cut channels and measure each of them by using a particular by: The effect of foreign entry on Argentina's domestic banking sector (English) Abstract.

The authors analyze how foreign entry affected domestic banks in Argentina during an especially intense period of entry in the mids. Their results are consistent with the hypothesis that foreign banks enter areas where they have a competitive advantage Cited by: restrictions on city commercial banks, and the opening up of the domestic market to foreign competition.

In order to comply with its world Trade Organisation (WTO) commitments, after the Chinese government progressively removed regulatory obstacles, to allow foreign banks access to its banking by: 7. The expansion of foreign banks entry into domestic banking sector abroad is on the basisof seeking It is on the pre mise that the gains obtained from do estic banking sector abroad may compensate any losses or decreases of earning at their home Size: KB.

Abstract. We investigate whether foreign bank penetration affects the risk-taking of domestic banks in emerging economies. By using bank-level data from 35 markets during the period ofwe find significant evidence that the riskiness of domestic banks increases with the presence of foreign banks, and this finding is shown to be consistent in a series of robustness Cited by: How does foreign entry affect domestic banking markets.

Stijn Claessens (), Asli Demirguc-Kunt and Harry Huizinga. Journal of Banking & Finance,vol. 25, issue 5, Date: References: View references in EconPapers View complete reference list from CitEc Citations: View citations in EconPapers () Track citations by RSS feed Downloads: (external link)Cited by: Foreign Banks: Trends, Impact and Financial Stability Prepared by Stijn Claessens and Neeltje van Horen1 With more limited entry (as a share of the total host banking system), fewer spillovers seem financial system and affect domestic financial systems, access to financial services, and.

Capital control is an action taken by a government, central bank, or regulatory body to limit the flow of foreign capital in and out of a domestic economy. more Austerity Definition.

Foreign Deposits: A deposit made at, or money put in to, domestic banks outside of the United States. These deposits are not subject to deposit insurance premiums (a premium paid to ensure that Author: Julia Kagan.

The Effects of Foreign Bank Entry on the Performance of Private Domestic Banks in Korea March Hyun E. Kim, Byung-Yoon Lee * * Head of Finance Studies Team (Associate Director) at the Institute of Monetary and Economic Research, the Bank of Korea, [email protected]; Deputy Fellow at the Korea Institute of Finance (KIF), [email protected]   Abstract.

This paper uses the entry of foreign banks into India during the s - analyzing variation in both the timing of the new foreign banks' entries and in their location - to estimate the effect of foreign bank entry on domestic credit access and firm by: their banking system’s assets.

Download How does foreign entry affect the domestic banking market? PDF

1 Some impacts of foreign bank entry have been thoroughly studied (see for example Clarke et al ()), while others are seldom mentioned. The aim of this paper consists in highlighting some policy-oriented issues that have arisen with the entry of foreign banks in emerging market economies from the point of File Size: KB.

The impact of foreign bank entry on the performance of domestic banks 4 The structure of the paper is organized as follows. Section 2 provides background elements on Chinese banking system and foreign bank entry.

Section 3 describes a review of related empirical literature dealing with the impacts of foreign bank entry. Section 4 describes. foreign banking market: Domestic bank loans provided for use abroad by foreigners. Loans of this nature are typically given in domestic currency.

The basic cause of difference between domestic and international marketing is the area of its implication and the market conditions. Domestic marketing is when the marketing of goods and services are limited to home country only while International marketing is the marketing is stretched across several countries in the world.

Overhead, profitability, and interest margins were affected least in domestic banks focused on consumer lending, an area in which foreign investors showed little interest.

Clarke, Cull, D'Amato, and Molinari analyze how foreign entry affected domestic banks in Argentina during an especially intense period of entry in the by: removal of excessive regulations to open up domestic financial markets to foreign bank entry (Hassan, Sanchez, Ngene, & Ashraf, ; Lee, ).

Details How does foreign entry affect the domestic banking market? PDF

Foreign bank presence has increased from 30% in to 43% by (Ghosh, ). Does foreign bank Cited by: 1. With the recent increase in foreign capital entry into the domestic banking industry, interest is growing regarding its effects on the domestic economy, such as on the profitability of.

Direct foreign investment, by bringing in scarce capital, may ease domestic firms' credit constraints. Alternatively, if foreign firms borrow heavily from domestic banks, they may exacerbate domestic firms' credit constraints by crowding them out of domestic capital markets.

One plausible mechanism by which this may happen is indirect.

Description How does foreign entry affect the domestic banking market? PDF

On the other hand, many argue that the entry of foreign banks in host country can worsen the banking system. If the domestic banks have weak capital and are inefficient in nature, for example, they may respond opposite to increase foreign entry by undertaking high risks activities in an attempt to earn good returns.

Stijn Claessens (born Constantijn Anton Marie Francois Claessens, J ) is a Dutch economist who currently serves as the Head of Financial Stability Policy department of the Bank for International Settlements.

He worked for fourteen years at World Bank beginning in until where he assumed various positions including that of Lead : Financial economics.

The TCJA effectively negates the prior ruling by stating that the calculation limiting a partner’s deductible amount of flow-through losses to their basis in their partnership interest now requires the partner to reduce their tax basis by their share of the partnership’s charitable contributions and foreign : Crystal Christenson.Banking rules can discriminate between countries of origin, based on bilateral treaties, reciprocity reasons or industry structure.

Alternatively, a country may restrict the expansion of its banks abroad. There are two forms of entry on a foreign market: 1) greenfield investment, which involves setting up an institution from scratch.Competition in the financial sector matters for a number of reasons.

As in other industries, the degree of competition in the financial sector can affect the efficiency of the production of financial services. Also, again as in other industries, it can affect the quality of financial products and the degree of innovation in the by: