Asymmetric financial integration bank ownership and monetary policy in emerging economies

Piotr Denderski and Wojtek Paczos

No 218, NBP Working Papers from Narodowy Bank Polski

Abstract: Over the last 30 years cross-country financial integration has increased significantly. In this process many banks in developing and transition economies became foreign-owned. Using a panel data on banks in eleven Central and Eastern Europe economies we provide new evidence that foreign-owned banks react differently to monetary policy changes than domestic-owned banks not only during financial crises but also in normal times. We embed bank heterogeneity in a stylized DSGE model featuring monopolistic competition in the banking sector and show that such a pattern may be driven not only by a facilitated access to internal market within the financial conglomerate they belong to but also by their competitive advantages. While the first mechanism leads to a decrease of the responsiveness of the banking sector to the monetary policy, the second mechanism does not.

Keywords: banks; bank ownership; bank lending channel; monetary policy (search for similar items in EconPapers)
JEL-codes: E44 E50 G21 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-mac, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Foreign Banks and The Bank Lending Channel (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:218

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