The Role of Foreign Capital in the Banking Sector for Financial Stability and Economic Development In Post-Communist Countries

Małgorzata Iwanicz-Drozdowska, Paola Bongini, Paweł Smaga, Bartosz Witkowski


The foreign capital in the banking sector plays an important role in Central, Eastern and South-Eastern European (CESEE) countries. The global financial crisis has shown that apart from the positive impact of foreign-owned banks, they also constitute a transmission channel for shocks to host countries. This study covers 20 CESEE countries over the period 1995–2014 and concentrates on the role of foreign-owned banks for financial stability and economic growth. Our results indicate that their role is neutral, however, a negative impact may be indirect because of their aggressive lending policies.


subsidiaries; foreign capital; financial stability; economic development

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Data publikacji: 2017-12-22 12:02:44
Data złożenia artykułu: 2017-04-21 17:32:13


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