Hidden Bibliographic Details
| Other authors / contributors: | Vázquez, Francisco F., author.
International Monetary Fund. Monetary and Capital Markets Department, issuing body.
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| ISBN: | 1282562177
9781282562172
1451912978
9781451912975
9781451993356
1451993358
1462353797
9781462353798
9786613822482
6613822485
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| Notes: | Includes bibliographical references (page 18).
Restrictions unspecified
Electronic reproduction. [Place of publication not identified] : HathiTrust Digital Library, 2010.
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212
English.
digitized 2010 HathiTrust Digital Library committed to preserve
Print version record.
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| Summary: | This paper assembles a bank-level dataset covering the operations of 38 international banks from eight industrial countries and their subsidiaries overseas during 1995-2004, and studies the extent of diversification gains from their local operations abroad. The paper finds that international banks with a larger share of assets allocated to foreign subsidiaries, particularly to those located in emerging market countries, are able to attain higher risk-adjusted returns. These gains are somewhat reduced- but by no means depleted-when international banks concentrate their subsidiaries in specific geographical regions. The paper also finds a substantial home bias in the international allocation of bank assets, relative to the results of a mean-variance portfolio optimization model. Overall, international diversification gains in banking appear to be substantial, albeit largely unexploited by current bank expansion strategies. These results suggest that international diversification gains could usefully be considered in the second pillar of Basel II as the first pillar is based only on the idiosyncratic risk of recipient countries.
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| Other form: | Print version: García-Herrero, Alicia. International diversification gains and home bias in banking. [Washington, D.C.?] : International Monetary Fund, ©2007
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| Standard no.: | 10.5089/9781451912975.001
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