Information or Regulation: What Drives the International Activities of Commercial Banks?

Information costs and regulatory barriers distinguish international financial markets from national ones. Using panel data on bilateral assets and liabilities of commercial banks, I empirically determine the impact of information, costs and regulations, and I isolate intra-EU financial linkages. I confirm that information costs and regulations are important factors influencing international asset choices of banks, but their relative importance differs among countries.

31. December 2003

Authors Claudia M. Buch

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