International Correspondent Bank Reputation

Provided by: Bowling Green State University
Topic: Software
Format: PDF
International reputation information is tested with a unique event, the passage and implementation of bank deposit insurance by Russia. Examining the Central Bank of Russia's accept and reject decisions for the sample of 576 banks applying for deposit insurance, this study finds that the foreign correspondent country is a significant determinant of domestic bank quality. High income and OECD country correspondents form relationships with higher quality Russian banks. Conversely, middle income and non-OECD country correspondents form relationships with lower quality banks. Further, the authors find evidence of within country bank reputation effects.

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