The Effect of Recent Changes in Foreign Banks’ Behavior on Banking Sector Concentration – First Evidence from 53 Countries

Aneta Hryckiewicz-Gontarczyk; Joanna Wierusz-Wróbel

Published : 2023-11-21

Vol. 59 No. 2 (2015)

The Effect of Recent Changes in Foreign Banks’ Behavior on Banking Sector Concentration – First Evidence from 53 Countries

Aneta Hryckiewicz-Gontarczyk

Joanna Wierusz-Wróbel

Abstract

The aim of this paper is to assess the impact of foreign banks’ withdrawals on banking sector concentration. The past decade has been characterized by large scale foreign bank withdrawals from countries where these institutions represent a significant part of the banking sector. An empirical analysis has been conducted for the banking sectors of 53 countries over the period 1997 to 2008. The major finding is that the foreign banks’ withdrawals are positively correlated with banking concentration. The greatest magnitude of the effect can be seen with respect to the deposit market. Surprisingly, however, we do not notice any greater effect of acquisition of divested banks on banking sector concentration as compared to other forms of withdrawals. This might suggest a tendency to split up banking operations among many market players.

Keywords:

bank concentration, banks’ withdrawals, financial stability

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Hryckiewicz-Gontarczyk, A., & Wierusz-Wróbel, J. (2023). The Effect of Recent Changes in Foreign Banks’ Behavior on Banking Sector Concentration – First Evidence from 53 Countries . Safe Bank, 59(2), 47–76. Retrieved from https://ojs.bfg.pl/index.php/bb/article/view/339

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Aneta Hryckiewicz-Gontarczyk

redakcja@bfg.pl

Affiliation:
Kozminski University Poland

Joanna Wierusz-Wróbel

redakcja@bfg.pl

Affiliation:
Kozminski University Poland