Why Do Banks Go Abroad?

Abstract

As we saw in previous chapters, one of the important characteristics of deepening financial integration that has occurred in several emerging market economies (EMEs) over the last two decades has been the increasing importance of foreign bank entry in domestic banking systems. As noted in Chapter 7, even though there exists considerable variation among countries and regions, over the period 1995 to 2009, the average share of foreign banks (in terms of numbers) has increased from 20 per cent to 34 per cent while in terms of assets, the share has grown from 22 per cent in 1996 to about 44 per cent in 2009 (Claessens and Van Horen, 2011).¹