Information or Regulation: What Drives the International Activities of Commercial Banks?

Author:
  • CBClaudia M. Buch
    Claudia M. Buch
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Abstract
Information costs and regulatory barriers distinguish international financial markets from national ones. Using panel data on bilateral assets and liabilities of commercial banks, I empirically determine the impact of information, costs and regulations, and I isolate intra-EU financial linkages. I confirm that information costs and regulations are important factors influencing international asset choices of banks, but their relative importance differs among countries.