Credit Institutions, Ownership and Bank Lending in Transition Countries

29 Pages Posted: 12 Apr 2016 Last revised: 13 Apr 2016

See all articles by Paul Wachtel

Paul Wachtel

New York University - Stern School of Business

Rainer F. H. Haselmann

Goethe University Frankfurt - Faculty of Economics and Business Administration; Leibniz Institute for Financial Research SAFE

Jonas Sobott

University of Bonn - Economic Science Area

Date Written: April 8, 2016

Abstract

The transition of banking in Central and Eastern Europe was nothing short of remarkable. All these countries now have market oriented banking systems that are largely free of government influence. This success is often attributed to the influence of foreign banks that brought modern technology and market based decision making. However, during the crisis foreign banks were a source of the transmission of financial fragility. In this paper we argue that the quality of banking institutions – credit institutions and the legal and regulatory structure – are important determinants of the success of a banking system. In particular, our empirical analysis shows that the crisis shock had a smaller impact on loan growth in countries with credit registers or bureaus for the recording of loans.

Suggested Citation

Wachtel, Paul and Haselmann, Rainer F. H. and Sobott, Jonas, Credit Institutions, Ownership and Bank Lending in Transition Countries (April 8, 2016). Available at SSRN: https://ssrn.com/abstract=2761169 or http://dx.doi.org/10.2139/ssrn.2761169

Paul Wachtel (Contact Author)

New York University - Stern School of Business ( email )

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HOME PAGE: http://www.stern.nyu.edu/~pwachtel

Rainer F. H. Haselmann

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Mertonstrasse 17-25
Frankfurt am Main, D-60325
Germany

Leibniz Institute for Financial Research SAFE ( email )

(http://www.safe-frankfurt.de)
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany

Jonas Sobott

University of Bonn - Economic Science Area ( email )

Adenauerallee 24-42
D-53113 Bonn
Germany

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