Bank Ownership: Trends and Implications
50 Pages Posted: 25 Apr 2017
Date Written: March 2017
This paper presents recent trends in bank ownership across countries and summarizes the evidence regarding the implications of bank ownership structure for bank performance and competition, financial stability, and access to finance. The evidence reviewed suggests that foreign-owned banks are more efficient than domestic banks in developing countries, promote competition in host banking sectors, and help stabilize credit when host countries face idiosyncratic shocks. But there are tradeoffs, since foreign-owned banks can transmit external shocks and might not always expand access to credit. The record on the impact of government bank ownership suggests few benefits, especially for developing countries.
Keywords: Foreign banks, Privatization, bank governance, financial globalization, state-owned banks, Financial Aspects of Economic Integration, Globalization: Finance, Government Policy and Regulation
JEL Classification: F23, F36, F65, G21, G28, G34
Suggested Citation: Suggested Citation