Unité mixte de recherche 7235

Credit risk of foreign bank branches and subsidiaries in Argentina and Uruguay

Michael Brei, Carlos Winograd

The paper presents both theoretical and empirical analysis to explain the differences in credit risks between branches and subsidiaries of foreign banks. Using a model with costly monitoring and asymmetric information (from the perspective of host country regulators and parent banks), we show theoretical evidence that the optimal amount of monitoring increases with the size of foreign affiliates (relative to their parent banks), regardless of whether their legal form is of a branch or subsidiary. In the case of small affiliates, we argue that there is a conflict of interest between parent banks and regulators, the former of which prefer to operate with riskier and ring-fenced subsidiaries, and the latter of which prefer better-monitored and co-insured branches. Using bank-level data on Argentina and Uruguay prior to their financial crises of 2001-02, we find that (i) larger foreign branches have lower ratios of non-performing loans than foreign subsidiaries and smaller branches and (ii) branches headquartered in more developed economies had fewer non-performing loans.

AGENDA

lundi 5 décembre 2022

Law, Institutions and Economics in Nanterre (LIEN)

Vincent Lefrère (Institut Mines Telecom)

En salle 614 et en distanciel

Privacy, Data and Competition: The Case of Apps For Young Children

mardi 6 décembre 2022

Recherche et Economie et Socioéconomie Politique, des Institutions et des Régulations (RESPIR)

Eric Monnet (EHESS et PSE)

Le rôle d’amortisseur des banques centrales – une perspective historique

jeudi 8 décembre 2022

Lunch

Georges Prat

12h - 13h, salle 110

Modeling ex-ante risk premiums in the oil market

lundi 12 décembre 2022

Law, Institutions and Economics in Nanterre (LIEN)

Clément Brébion (Copenhagen BS)

En salle 614 et en distanciel

Unemployment Insurance Eligibility and Employment Duration

mardi 13 décembre 2022

Développement Durable Environnement et Energie (DDEE)

Nicolas Astier (Paris School of Economics)

16h-17h

Riding together: eliciting travelers’ preferences for long-distance carpooling

mercredi 14 décembre 2022

Économies du monde musulman

Mohamed Touati Tliba (École Supérieure de Commerce, Alger)

The scientific wealth of nations with special reference to MENA region: a cross-country productivity analysis of academic research

jeudi 15 décembre 2022

Doctorants

Pablo Aguilar Perez

TBA

jeudi 15 décembre 2022

Groupe de travail « Intelligence artificielle »

Matthieu Lapaty (UPMC)

TBA

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