European banks straddling borders: Risky or rewarding?

Patty Duijm, Dirk Schoenmaker

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)
57 Downloads (Pure)

Abstract

Banks that straddle borders may not only do so via foreign subsidiaries; they can also conduct their cross-border banking activities via a branch or directly to customers. Existing studies on the impact of cross-border banking often focus on the cross-border activities via foreign subsidiaries. We use a unique hand-collected dataset with cross-border activities for the 61 largest European banks to study the impact cross-border banking has on the risk-return profile of an individual bank. Our results show that cross-border banking decreases banks’ risk, by lowering the insolvency risk and generating a more stable income profile.
Original languageEnglish
Article number101525
Number of pages7
JournalFinance Research Letters
Volume38
DOIs
Publication statusPublished - Jan 2021

Bibliographical note

Publisher Copyright:
© 2020 Elsevier Inc.

Research programs

  • RSM F&A

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