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|dc.contributor.author||Weller, Christian E.||en_US|
|dc.description.abstract||The number of multinational banks have increased in transition economies in Central andEastern Europe, while the amount of real credit has simultaneously decreased. Based on thecases of Poland and Hungary during the first six years of economic transition this paperinvestigates if there is a link between greater international financial competition and less realcredit. I provide a theoretical argument that connects the number of multinational banks to theavailability of capital for domestic banks, and hence to their lending capacity. In support of thisargument, I employ data from both countries' central banks, central statistical offices, andprivate institutions, as well as from international institutions, such as IMF and BIS. The evidencesuggests that the increases in efficiency which result from greater competition do not outweighthe limitations on the capital base of domestic banks. Consequently, I find that the constraintsthat international financial competition places on domestic banks to raise their capital leadsthem to reduce their commercial lending activities in the early stages of financial liberalization.||-|
|dc.relation.ispartofseries|||aZEI working paper |xB 08-1999||en_US|
|dc.title||The connection between more multinational banks and less real credit in transition economies||en_US|
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