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Who needs foreign banks? CEPS Working Document No. 185, September 2002

Gros, Daniel. (2002) Who needs foreign banks? CEPS Working Document No. 185, September 2002. [Working Paper]

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    Abstract

    This paper shows that countries with weak banking system and fiscal institutions, might benefit from the presence of foreign banks, which can constitute a commitment and transparency device. Foreign banks can also reduce the probability of self-fulfilling speculative attacks. A strong presence of foreign banks can make a currency peg feasible in the first place by rendering it more resistant to speculative attacks. The European experience is instructive in this respect. In all of the candidate countries from Central and Eastern Europe (CEEC) the banking system is now dominated by foreign banks. This is now taken for granted, but it is unusual if one looks at the existing EU-15 members, where foreign banks play a marginal role in even the smallest economies.

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    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > External relations > EU-Central and Eastern Europe
    EU policies and themes > Treaty reform > enlargement
    EU policies and themes > Policies & related activities > economic and financial affairs > monetary policy
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Working Documents
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 12 Jul 2004
    Page Range: p. 23
    Last Modified: 15 Feb 2011 17:20
    URI: http://aei.pitt.edu/id/eprint/1823

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