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Journal of Financial Intermediation Vol. 20 No. 2 2011

Regulation of multinational banks: A theoretical inquiry

Giacomo Calzolari1,2,3; Gyöngyi Lóránth

1 Centre for Economic Policy Research · 2 European University Institute · 3 University of Bologna

open access

Abstract

This paper examines national regulators’ incentives to intervene in a multinational bank’s activities and the extent to which these incentives differ with the bank’s foreign representation choice (branch or subsidiary). Shared liability leads to higher incentives for intervention than legal separation. Cross-border deposit insurance, on the other hand, yields less intervention than when regulators compensate local depositors only. Based on these results, we derive implications for multinational banks’ and regulators’ preference on foreign expansion and representation.

DOI
10.1016/j.jfi.2010.02.002
Volume
20
Issue
2
Pages
178-198
Language
en
Sources
crossref bibtex:phds-export.bib openalex

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