Competitive Implications of Cross-Border Banking
This paper reviews the recent literature on cross-border banking, with a focus on policy implications. Cross-border banking has increased sharply in recent decades, particularly in the form of entry, and has affected the development of financial systems, access to financial services, and stability....
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/02/6606427/competitive-implications-cross-border-banking http://hdl.handle.net/10986/8753 |
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okr-10986-87532021-04-23T14:02:40Z Competitive Implications of Cross-Border Banking Claessens, Stijn ACCESS TO INFORMATION ACCOUNTING ADVERSE EFFECTS AGENTS BANKING SERVICES BANKING SYSTEM BANKING SYSTEMS BANKS BARRIERS TO ENTRY BENCHMARK BORROWING CAPITAL FLIGHT CAPITAL FLOWS CAPITAL MARKETS CENTRAL BANK CLEARING SYSTEMS COMPARATIVE ADVANTAGE COMPETITION POLICY COMPETITIVENESS CONSOLIDATION CONTAGION CORPORATE BANKING CORPORATE FINANCE CORPORATE GOVERNANCE COST OF CAPITAL DEREGULATION ECONOMIES OF SCALE EMERGING MARKETS EQUITY MARKETS EXTERNALITIES FACE VALUE FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS FIXED COSTS FOREIGN BANKS FOREIGN ENTRY GLOBAL FINANCIAL INTEGRATION GLOBALIZATION INFORMATION INFORMATION DISCLOSURE INFORMATION SYSTEMS INFORMATION TECHNOLOGY INSURANCE INTEREST RATES INVESTMENT BANKING KNOW-HOW LENDING BEHAVIOR LEVEL PLAYING FIELD LIQUIDITY MERGERS MIGRATION MORAL HAZARD NATURAL MONOPOLY NETWORK EXTERNALITIES NETWORK SERVICES NETWORKS OPERATING COSTS POLITICAL ECONOMY PRIVATIZATION PROFITABILITY REGULATORY FRAMEWORK RELATIONSHIP LENDING RETAIL BANKING RETURN ON INVESTMENT RISK MANAGEMENT SAVINGS SCALE EFFECTS SECURITIES SECURITIES MARKETS SECURITIES TRADING STOCK EXCHANGES STOCK MARKETS SUNK COSTS TELECOMMUNICATIONS TRADING SYSTEMS TRANSPARENCY WTO This paper reviews the recent literature on cross-border banking, with a focus on policy implications. Cross-border banking has increased sharply in recent decades, particularly in the form of entry, and has affected the development of financial systems, access to financial services, and stability. Reviewing the empirical literature, the author finds much, although not uniform, evidence that cross-border banking supports the development of an efficient and stable financial system that offers a wide access to quality financial services at low cost. But as better financial systems have more cross-border banking, the relationship between cross-border banking and competitiveness has to be carefully judged. While developing countries have some special conditions, provided a minimum degree of oversight is in place, they experience effects similar to industrial countries. There are some questions, though, on the effects of cross-border banking on lending based on softer information and on stability. Relevant experiences from capital markets show that the degree of cross-border financial activities can affect local market sustainability and there can be path dependency when opening up to cross-border competition. Reviewing the fast changing landscape of financial services provision, the author argues that cross-border banking highlights the increased importance of competition policy in financial services provision. This competition policy cannot be traditional, institutional based, but will need to resemble that used in other network industries. Furthermore, with globalization accelerating, competition policy will need to be global, supported by greater cross-border institutional collaboration and using the General Agreement on Trade in Services (GATS) process and the disciplines of the World Trade Organization. GATS can be of special value to developing countries as it provides a binding, pro-competition framework that has proven more difficult to establish otherwise. 2012-06-22T14:10:03Z 2012-06-22T14:10:03Z 2006-02-01 http://documents.worldbank.org/curated/en/2006/02/6606427/competitive-implications-cross-border-banking http://hdl.handle.net/10986/8753 English Policy, Research working paper ; no. WPS 3854 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Publications & Research The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO INFORMATION ACCOUNTING ADVERSE EFFECTS AGENTS BANKING SERVICES BANKING SYSTEM BANKING SYSTEMS BANKS BARRIERS TO ENTRY BENCHMARK BORROWING CAPITAL FLIGHT CAPITAL FLOWS CAPITAL MARKETS CENTRAL BANK CLEARING SYSTEMS COMPARATIVE ADVANTAGE COMPETITION POLICY COMPETITIVENESS CONSOLIDATION CONTAGION CORPORATE BANKING CORPORATE FINANCE CORPORATE GOVERNANCE COST OF CAPITAL DEREGULATION ECONOMIES OF SCALE EMERGING MARKETS EQUITY MARKETS EXTERNALITIES FACE VALUE FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS FIXED COSTS FOREIGN BANKS FOREIGN ENTRY GLOBAL FINANCIAL INTEGRATION GLOBALIZATION INFORMATION INFORMATION DISCLOSURE INFORMATION SYSTEMS INFORMATION TECHNOLOGY INSURANCE INTEREST RATES INVESTMENT BANKING KNOW-HOW LENDING BEHAVIOR LEVEL PLAYING FIELD LIQUIDITY MERGERS MIGRATION MORAL HAZARD NATURAL MONOPOLY NETWORK EXTERNALITIES NETWORK SERVICES NETWORKS OPERATING COSTS POLITICAL ECONOMY PRIVATIZATION PROFITABILITY REGULATORY FRAMEWORK RELATIONSHIP LENDING RETAIL BANKING RETURN ON INVESTMENT RISK MANAGEMENT SAVINGS SCALE EFFECTS SECURITIES SECURITIES MARKETS SECURITIES TRADING STOCK EXCHANGES STOCK MARKETS SUNK COSTS TELECOMMUNICATIONS TRADING SYSTEMS TRANSPARENCY WTO |
| spellingShingle |
ACCESS TO INFORMATION ACCOUNTING ADVERSE EFFECTS AGENTS BANKING SERVICES BANKING SYSTEM BANKING SYSTEMS BANKS BARRIERS TO ENTRY BENCHMARK BORROWING CAPITAL FLIGHT CAPITAL FLOWS CAPITAL MARKETS CENTRAL BANK CLEARING SYSTEMS COMPARATIVE ADVANTAGE COMPETITION POLICY COMPETITIVENESS CONSOLIDATION CONTAGION CORPORATE BANKING CORPORATE FINANCE CORPORATE GOVERNANCE COST OF CAPITAL DEREGULATION ECONOMIES OF SCALE EMERGING MARKETS EQUITY MARKETS EXTERNALITIES FACE VALUE FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS FIXED COSTS FOREIGN BANKS FOREIGN ENTRY GLOBAL FINANCIAL INTEGRATION GLOBALIZATION INFORMATION INFORMATION DISCLOSURE INFORMATION SYSTEMS INFORMATION TECHNOLOGY INSURANCE INTEREST RATES INVESTMENT BANKING KNOW-HOW LENDING BEHAVIOR LEVEL PLAYING FIELD LIQUIDITY MERGERS MIGRATION MORAL HAZARD NATURAL MONOPOLY NETWORK EXTERNALITIES NETWORK SERVICES NETWORKS OPERATING COSTS POLITICAL ECONOMY PRIVATIZATION PROFITABILITY REGULATORY FRAMEWORK RELATIONSHIP LENDING RETAIL BANKING RETURN ON INVESTMENT RISK MANAGEMENT SAVINGS SCALE EFFECTS SECURITIES SECURITIES MARKETS SECURITIES TRADING STOCK EXCHANGES STOCK MARKETS SUNK COSTS TELECOMMUNICATIONS TRADING SYSTEMS TRANSPARENCY WTO Claessens, Stijn Competitive Implications of Cross-Border Banking |
| geographic_facet |
The World Region |
| relation |
Policy, Research working paper ; no. WPS 3854 |
| description |
This paper reviews the recent literature on cross-border banking, with a focus on policy implications. Cross-border banking has increased sharply in recent decades, particularly in the form of entry, and has affected the development of financial systems, access to financial services, and stability. Reviewing the empirical literature, the author finds much, although not uniform, evidence that cross-border banking supports the development of an efficient and stable financial system that offers a wide access to quality financial services at low cost. But as better financial systems have more cross-border banking, the relationship between cross-border banking and competitiveness has to be carefully judged. While developing countries have some special conditions, provided a minimum degree of oversight is in place, they experience effects similar to industrial countries. There are some questions, though, on the effects of cross-border banking on lending based on softer information and on stability. Relevant experiences from capital markets show that the degree of cross-border financial activities can affect local market sustainability and there can be path dependency when opening up to cross-border competition. Reviewing the fast changing landscape of financial services provision, the author argues that cross-border banking highlights the increased importance of competition policy in financial services provision. This competition policy cannot be traditional, institutional based, but will need to resemble that used in other network industries. Furthermore, with globalization accelerating, competition policy will need to be global, supported by greater cross-border institutional collaboration and using the General Agreement on Trade in Services (GATS) process and the disciplines of the World Trade Organization. GATS can be of special value to developing countries as it provides a binding, pro-competition framework that has proven more difficult to establish otherwise. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Claessens, Stijn |
| author_facet |
Claessens, Stijn |
| author_sort |
Claessens, Stijn |
| title |
Competitive Implications of Cross-Border Banking |
| title_short |
Competitive Implications of Cross-Border Banking |
| title_full |
Competitive Implications of Cross-Border Banking |
| title_fullStr |
Competitive Implications of Cross-Border Banking |
| title_full_unstemmed |
Competitive Implications of Cross-Border Banking |
| title_sort |
competitive implications of cross-border banking |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/02/6606427/competitive-implications-cross-border-banking http://hdl.handle.net/10986/8753 |
| _version_ |
1764405948843032576 |