A subsidiary failure may deteriorate the bank holding company's (BHC) financial conditions. BHCs' managers possess better knowledge than market investors concerning the likelihood of subsidiary failure, which gives rise to information asymmetry. We examine the effects of this information...

Foreign financial institutions bought overwhelming stakes in central and east European (CEE) banks during the postcommunist transition. Recent estimates suggest that foreign banks, mostly western, own over sixty percent of all CEE banking assets, and in seven CEE states, the figure is over...