@techreport{Weller1999connection,
abstract = {The number of multinational banks have increased in transition economies in Central and
Eastern Europe, while the amount of real credit has simultaneously decreased. Based on the
cases of Poland and Hungary during the first six years of economic transition this paper
investigates if there is a link between greater international financial competition and less real
credit. I provide a theoretical argument that connects the number of multinational banks to the
availability of capital for domestic banks, and hence to their lending capacity. In support of this
argument, I employ data from both countries' central banks, central statistical offices, and
private institutions, as well as from international institutions, such as IMF and BIS. The evidence
suggests that the increases in efficiency which result from greater competition do not outweigh
the limitations on the capital base of domestic banks. Consequently, I find that the constraints
that international financial competition places on domestic banks to raise their capital leads
them to reduce their commercial lending activities in the early stages of financial liberalization.},
address = {Bonn},
author = {Christian E. Weller},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {F23; F36; O16; O52; 330},
language = {eng},
number = {B 08-1999},
publisher = {ZEI},
title = {The connection between more multinational banks and less real credit in transition economies},
type = {ZEI working paper},
url = {http://hdl.handle.net/10419/39546},
year = {1999}
}
