Corporate governance and intra-group transactions in european bank holding companies during the crisis
Global Banking, Financial Markets and Crises
ISBN: 978-1-78350-170-0, eISBN: 978-1-78350-171-7
Publication date: 24 October 2013
Abstract
In this chapter we study the intra-group transactions between the parent bank and its foreign subsidiaries in European Union (EU) countries during the crisis. We use hand-collected data from annual statements on related party transaction and find that they may create a serious problem for the stability of the foreign banks’ subsidiaries. Moreover, as some of those subsidiary banks were large by assets in some of the member states the related party transactions with the parent bank created a serious threat to the host countries’ financial system stability. We attribute this transaction to the weak governance in foreign subsidiaries. We suggest improvements in governance as well as greater disclosure of related party transactions in bank holding companies in Europe.
Keywords
Acknowledgements
Acknowledgments
We would like to thank Editors Bang Nam Jeon and Maria Pia Olivero for assistance. We also thank Iftekhar Hasan, Yawen Jiao, and the participants of the seminar at Lally School Management and Technology at the Rensselaer Polytechnic Institute and the Kozminski University for their valuable comments. Oskar Kowalewski work was supported by Polish National Science Centre (NCN) contract nr DEC-2012/07/B/HS4/03091.
Citation
Allen, F., Gu, X. and Kowalewski, O. (2013), "Corporate governance and intra-group transactions in european bank holding companies during the crisis", Global Banking, Financial Markets and Crises (International Finance Review, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 365-431. https://doi.org/10.1108/S1569-3767(2013)0000014016
Publisher
:Emerald Group Publishing Limited
Copyright © 2013 Emerald Group Publishing Limited