With the increasing domination of foreign capital in banking sectors of transition countries, it is of the highest interest to investigate the relative performance of domestic-owned and foreign-owned banks in these countries. We therefore aim here to compare the technical efficiency of...

This paper analyses the implications of bank equity investment in firms on the stability of the banking system under conditions of asymmetric information and moral hazard. We show that there exists a « U-shaped » relationship between the risk of the universal and the investment banks?' asset...

This paper aims at providing theoretical foundations to the role of customer relationship as a strategic barrier to entry on banking markets. A bank which grants a loan to a customer gains a comparative advantage in information on this customer as compared with competitors. This informational...

The literature on bank provisioning behaviour shows that changes in loan loss provisions are counter-cyclical. Based on this stylised fact, this paper develops a partial equilibrium model of a banking firm that analyzes how provisioning rules influence credit market fluctuations. The model and...