efficiency of the least efficient bank active in a host country increases the greater the impediments to banking across borders …

more open to foreign entry. In the model, banking sector integration leads to bank exit and entry and convergence in the … return on loans and funding costs across countries. Bank heterogeneity matters for the associated welfare gains. Results … suggest that differences in bank efficiencies across countries drive banking across borders, that fixed costs are crucial for …

The German financial system is characterized by lower degrees of penetration by foreign commercial banks and of (bank …