Funding Costs and Loan Pricing by Multinational Bank Affiliates

0339946 - ÚTIA 2011 RIV CZ eng J - Journal Article
Derviz, Alexis
Funding Costs and Loan Pricing by Multinational Bank Affiliates.
Working Paper CNB. Roč. 9, č. 9 (2009), s. 1-48. ISSN 1803-7070
Institutional research plan: CEZ:AV0Z10750506
Keywords : multinational banks * bank loan pricing * internal capital market
Subject RIV: AH - Economics
http://library.utia.cas.cz/separaty/2010/E/derviz-funding costs and loan pricing by multinational bank affiliates.pdf

The paper constructs a model of lending rate determination for a risky loan with the dependence on the lender funding costs. The model is applied to the problem of loan pricing by an affiliate of a multinational bank and its dependence on the parent bank condition. Testable implications of the model are applied to the ten biggest banks in the Czech Republic with a majority foreign shareholder. It is shown that, although occasionally statistically significant, foreign parent effects are usually of minor economic significance in the case of the Czech banking sector
Permanent Link: http://hdl.handle.net/11104/0183312