Abstrakt
This paper investigates the role of home monetary policy stance and banking regulation on short-term noncore funding in Central, Eastern and Southeastern Europe using a sample of local subsidiaries. We find that the accumulation and dynamic of noncore funding differ significantly between subsidiaries in EU vs. non-EU host countries.
While the direct impact of home monetary policy is to a certain extent limited it is amplified through several channels. The most potent among them are the characteristics of the parent bank: capitalization, liquidity, loan growth aggressiveness, provisioning policies and its relative size vis-A -vis a subsidiary.
Regulation has only marginal effects and seems to be more potent for the subsidiaries operating in the EU countries. At the same time, host bank regulation seems neutral to the dynamics of the noncore funding and risk build-up on the liability side of the subsidiaries operating under those regimes.