Institute of Information Theory and Automation

Publication details

Funding Costs and Loan Pricing by Multinational Bank Affiliates

Journal Article

Derviz Alexis

serial: Working Paper CNB vol.9, 9 (2009), p. 1-48

research: CEZ:AV0Z10750506

keywords: multinational banks, bank loan pricing, internal capital market

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abstract (eng):

The paper constructs a model of lending rate determination for a risky loan with the dependence on the lender funding costs. The model is applied to the problem of loan pricing by an affiliate of a multinational bank and its dependence on the parent bank condition. Testable implications of the model are applied to the ten biggest banks in the Czech Republic with a majority foreign shareholder. It is shown that, although occasionally statistically significant, foreign parent effects are usually of minor economic significance in the case of the Czech banking sector


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Last modification: 21.12.2012
Institute of Information Theory and Automation