Home-Host Banking Issues and Non-Core Funding—Evidence from Central and Eastern Europe

Adrian Babin ()

Open Economies Review, 2015, vol. 26, issue 3, 447-477

Abstract: This paper investigates the role of home monetary policy stance and banking regulation on short-term noncore funding in Central, Eastern and Southeastern Europe using a sample of local subsidiaries. We find that the accumulation and dynamic of noncore funding differ significantly between subsidiaries in EU vs. non-EU host countries. While the direct impact of home monetary policy is to a certain extent limited it is amplified through several channels. The most potent among them are the characteristics of the parent bank: capitalization, liquidity, loan growth aggressiveness, provisioning policies and its relative size vis-à-vis a subsidiary. Regulation has only marginal effects and seems to be more potent for the subsidiaries operating in the EU countries. At the same time, host bank regulation seems neutral to the dynamics of the noncore funding and risk build-up on the liability side of the subsidiaries operating under those regimes. Copyright Springer Science+Business Media New York 2015

Keywords: Noncore funding; Internal capital markets; Cross-border banking; Monetary policy; Bank risk; JEL codes; E44; E55; F36; F42; G01; G15; G32 (search for similar items in EconPapers)
JEL-codes: E44 F36 F42 G01 G15 G32 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11079-015-9357-9

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