News Column

EBRD-The dark and bright sides of global banking

August 14, 2014



ENP Newswire - 14 August 2014

Release date- 13082014 - A new EBRD working paper contains a (somewhat) cautionary tale from emerging Europe about the benefits and risks of global banking.

This EBRD working paper by Ralph De Haas reviews the literature on the benefits and risks of global banking, with a focus on emerging Europe. It argues that while the potential destabilising impact of global banks was well understood before the 2008-09 financial crisis, the sheer magnitude of this impact in the case of systemically relevant foreign bank subsidiaries was under-appreciated.

A second lesson from the crisis is that banks' funding structure, in particular the use of short-term wholesale funding, matters as much for lending stability as does their ownership structure.


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Source: ENP Newswire


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