Rainer Frey - Academia.edu (original) (raw)

Papers by Rainer Frey

Research paper thumbnail of CESifo Forum 3/200549 Focus CHINA’S GROWING IMPORTANCE FOR GERMAN INVESTMENT

China’s role in the world The economic opening-up of China began in the late 1970s, and since the... more China’s role in the world The economic opening-up of China began in the late 1970s, and since the start of the 1990s the country has been an important location for investment and a trading nation on a global scale. China's integration into the world markets resulted in rapid growth of its economy, which, according to official Chinese sources, increased the country’s real gross domestic product by an average of 81/2 percent a year between 1995 and 2004. The process has also resulted in China now being the seventh-largest economy in the world in terms of GDP. Even so, per capita GDP is still relatively low owing to China’s enormous popu-lation. Foreign direct investment in China has also grown

Research paper thumbnail of Banks' Holdings of Risky Sovereign Bonds in the Absence of the Nexus: Yield Seeking with Central Bank Funding or De-Risking?

SSRN Electronic Journal, 2019

Research paper thumbnail of Competition between foreign affiliates: Multinational banks internal funding in the crisis

We investigate how the lending activities of a multinational bank s affiliates located abroad are... more We investigate how the lending activities of a multinational bank s affiliates located abroad are affected by funding difficulties in view of the financial crisis. For this, we consider transaction-induced changes in long-term lending to the private sector of 40 countries by the affiliates of the 68 largest German banks. We find that affiliates local deposits and profitability have been stabilizing loan supply. By contrast, relying on short-term wholesale funding has increasingly proven to be a disadvantage in the crisis, as inter-bank and capital markets froze. Besides, the more an affiliate abroad takes recourse to intra-bank funding in the crisis, the more it becomes dependent on a stable deposit and long-term wholesale funding position of its parent bank. We furthermore detect competition for intra-bank funding across the affiliates abroad as well as an increasing focus on the parent bank s home market activities.

Research paper thumbnail of Multinational Banks' Deleveraging in the Crisis Driven by Pre-Crisis Characteristics and Behavior

SSRN Electronic Journal, 2015

Research paper thumbnail of Benefits of Internationalisation for Acquirers and Targets - But Unevenly Distributed

SSRN Electronic Journal, 2021

Research paper thumbnail of Withdrawal from Foreign Lending in the Financial Crisis by Parent Banks and Their Branches and Subsidiaries: Supply Versus Demand Effects

Journal of Financial Services Research, 2016

This study investigates the different channels through which internationally active banks can pro... more This study investigates the different channels through which internationally active banks can provide loans abroad. Using data on German banks from 2002 to 2010, we contrast determinants for cross-border lending by the parent bank with lending by affiliates located abroad. We show that lending by parent banks is based almost entirely on supply-side determinants, in particular on bank-specific factors. The more the loans are intermediated by banks’ affiliates located abroad, the more relevant become foreign countries’ demand and risk characteristics. This applies in particular when banks operate via locally focused affiliates - rather than regionally active hub affiliates - as well as when the affiliates have the status of branches as opposed to legally independent subsidiaries. In general, banks with a greater risk aversion withdraw more from foreign lending during the financial crisis, especially following the collapse of Lehman Brothers. However, at a Tier I capital ratio of around 11 %, a further increase in the ratio did not affect lending anymore.

Research paper thumbnail of Multinational banks’ deleveraging in the crisis preceded by expansion and profit seeking

Journal of Multinational Financial Management, 2016

After the collapse of Lehman Brothers, a rapid and far-reaching shrinkage of international banks’... more After the collapse of Lehman Brothers, a rapid and far-reaching shrinkage of international banks’ assets with a focus on foreign claims took place. For the largest 67 German banking groups in the pre-crisis period, we find that their characteristics both in levels and in trends had repercussions for the crisis period. Above all, prior non-traditional banking activities resulted in balance sheet contraction during the crisis. A disproportionately high growth rate in profits to assets from 2002 to mid-2008 is found to be indicative of too much risk taking. High average income and strong growth in assets in the three and a half years before the crisis put balance sheets during the crisis under adjustment pressure. The results are driven by the group of banks with large foreign assets and especially by the withdrawal of assets vis-a-vis non-financial centers.

Research paper thumbnail of European market integration through technology-driven M&As

Research paper thumbnail of China's Growing Importance for German

Research paper thumbnail of Fallstricke bei der Bestimmung von Vermögensverlusten deutscher Anleger im Ausland

Research paper thumbnail of Auslandsforderungen deutscher Bankkonzerne in der Finanzkrise: Ein vielschichtiger Bilanzabbau in zwei Phasen

Vierteljahrshefte zur Wirtschaftsforschung, 2013

Research paper thumbnail of Competition for Internal Funds within Multinational Banks: Foreign Affiliate Lending in the Crisis

SSRN Electronic Journal, 2000

Research paper thumbnail of Welfare Implications of the Design of an Asymmetric Currency Union with Output Persistence

Consideration is given to how the welfare of the Member countries of a currency union is affected... more Consideration is given to how the welfare of the Member countries of a currency union is affected by asymmetric national output shocks. It is shown that relatively small member countries favour a situation where the group of national central bank presidents is in a strong position while large countries prefer decisions to be taken by the central- bank board. The

Research paper thumbnail of Der Informationsgehalt des Geldmengenziels der Deutschen Bundesbank-Ergebnisse einer Umfrage aus dem Jahr 1998

The German central bank, Deutsche Bundesbank, conducted monetary targeting until the end of the y... more The German central bank, Deutsche Bundesbank, conducted monetary targeting until the end of the year 1998. By the announcement of a monetary target, the central bank wanted to inform the public of its monetary stance. If the information-transmisson process has been successful, I checked by the use of a survey. In the survey, I questioned research institutes, large enterprises, unions

Research paper thumbnail of China's growing importance for German investment

Research paper thumbnail of The discontinuous integration of Western Europe's heterogeneous market for corporate control from 1995 to 2007

As, in Europe, many institutional reforms have been undertaken to establish an economic union, it... more As, in Europe, many institutional reforms have been undertaken to establish an economic union, it can be expected that the relevance of borders has decreased over time. For the EU 15, we investigate the expected integration process of the market for corporate control - an illustrative market for studying integration issues - over the period from 1995 to 2007. Our

Research paper thumbnail of Cross-border bank lending, risk aversion and the financial crisis

This study investigates the determinants of adjustments in the provision of cross-border loans by... more This study investigates the determinants of adjustments in the provision of cross-border loans by internationally active banks. For the period from 2002 to 2010, we look at quarterly transaction data (excluding valuation effects) on long-term loans issued by the largest 69 German banking groups to the private sector of 66 countries. We show that the parent bank's lending adjustment is

Research paper thumbnail of Welfare Implications of the Design of a Currency Union in Case of Member Countries of Different Sizes and Output Persistence

In the study, the relevance of several optimum-currency-area (OCA) criteria is formally worked ou... more In the study, the relevance of several optimum-currency-area (OCA) criteria is formally worked out in a welfare approach. The optimum monetary-policy rules of the supranational central bank are derived within the Barro-Gordon framework, and consideration is given to how the welfare of the member countries of a currency union is affected by symmetric and asymmetric national output shocks. The welfare

Research paper thumbnail of Exchange Rate Volatility and International Trade - Some GARCH Estimations Stress the Importance of Trade Diversification

This paper investigates the impact of short-run volatility of exchange rates on the volume of exp... more This paper investigates the impact of short-run volatility of exchange rates on the volume of exports. After a brief introduction of the underlying theories, the relationship between these two variables is estimated. In the regression, the conditional variance of the nominal-effective-exchange rate is the measure of uncertainty (GARCH estimation). The estimation differs from previous studies especially with respect to the

Research paper thumbnail of Same as it ever was? Europe's national borders and the market for corporate control

Journal of International Money and Finance, 2014

Research paper thumbnail of CESifo Forum 3/200549 Focus CHINA’S GROWING IMPORTANCE FOR GERMAN INVESTMENT

China’s role in the world The economic opening-up of China began in the late 1970s, and since the... more China’s role in the world The economic opening-up of China began in the late 1970s, and since the start of the 1990s the country has been an important location for investment and a trading nation on a global scale. China's integration into the world markets resulted in rapid growth of its economy, which, according to official Chinese sources, increased the country’s real gross domestic product by an average of 81/2 percent a year between 1995 and 2004. The process has also resulted in China now being the seventh-largest economy in the world in terms of GDP. Even so, per capita GDP is still relatively low owing to China’s enormous popu-lation. Foreign direct investment in China has also grown

Research paper thumbnail of Banks' Holdings of Risky Sovereign Bonds in the Absence of the Nexus: Yield Seeking with Central Bank Funding or De-Risking?

SSRN Electronic Journal, 2019

Research paper thumbnail of Competition between foreign affiliates: Multinational banks internal funding in the crisis

We investigate how the lending activities of a multinational bank s affiliates located abroad are... more We investigate how the lending activities of a multinational bank s affiliates located abroad are affected by funding difficulties in view of the financial crisis. For this, we consider transaction-induced changes in long-term lending to the private sector of 40 countries by the affiliates of the 68 largest German banks. We find that affiliates local deposits and profitability have been stabilizing loan supply. By contrast, relying on short-term wholesale funding has increasingly proven to be a disadvantage in the crisis, as inter-bank and capital markets froze. Besides, the more an affiliate abroad takes recourse to intra-bank funding in the crisis, the more it becomes dependent on a stable deposit and long-term wholesale funding position of its parent bank. We furthermore detect competition for intra-bank funding across the affiliates abroad as well as an increasing focus on the parent bank s home market activities.

Research paper thumbnail of Multinational Banks' Deleveraging in the Crisis Driven by Pre-Crisis Characteristics and Behavior

SSRN Electronic Journal, 2015

Research paper thumbnail of Benefits of Internationalisation for Acquirers and Targets - But Unevenly Distributed

SSRN Electronic Journal, 2021

Research paper thumbnail of Withdrawal from Foreign Lending in the Financial Crisis by Parent Banks and Their Branches and Subsidiaries: Supply Versus Demand Effects

Journal of Financial Services Research, 2016

This study investigates the different channels through which internationally active banks can pro... more This study investigates the different channels through which internationally active banks can provide loans abroad. Using data on German banks from 2002 to 2010, we contrast determinants for cross-border lending by the parent bank with lending by affiliates located abroad. We show that lending by parent banks is based almost entirely on supply-side determinants, in particular on bank-specific factors. The more the loans are intermediated by banks’ affiliates located abroad, the more relevant become foreign countries’ demand and risk characteristics. This applies in particular when banks operate via locally focused affiliates - rather than regionally active hub affiliates - as well as when the affiliates have the status of branches as opposed to legally independent subsidiaries. In general, banks with a greater risk aversion withdraw more from foreign lending during the financial crisis, especially following the collapse of Lehman Brothers. However, at a Tier I capital ratio of around 11 %, a further increase in the ratio did not affect lending anymore.

Research paper thumbnail of Multinational banks’ deleveraging in the crisis preceded by expansion and profit seeking

Journal of Multinational Financial Management, 2016

After the collapse of Lehman Brothers, a rapid and far-reaching shrinkage of international banks’... more After the collapse of Lehman Brothers, a rapid and far-reaching shrinkage of international banks’ assets with a focus on foreign claims took place. For the largest 67 German banking groups in the pre-crisis period, we find that their characteristics both in levels and in trends had repercussions for the crisis period. Above all, prior non-traditional banking activities resulted in balance sheet contraction during the crisis. A disproportionately high growth rate in profits to assets from 2002 to mid-2008 is found to be indicative of too much risk taking. High average income and strong growth in assets in the three and a half years before the crisis put balance sheets during the crisis under adjustment pressure. The results are driven by the group of banks with large foreign assets and especially by the withdrawal of assets vis-a-vis non-financial centers.

Research paper thumbnail of European market integration through technology-driven M&As

Research paper thumbnail of China's Growing Importance for German

Research paper thumbnail of Fallstricke bei der Bestimmung von Vermögensverlusten deutscher Anleger im Ausland

Research paper thumbnail of Auslandsforderungen deutscher Bankkonzerne in der Finanzkrise: Ein vielschichtiger Bilanzabbau in zwei Phasen

Vierteljahrshefte zur Wirtschaftsforschung, 2013

Research paper thumbnail of Competition for Internal Funds within Multinational Banks: Foreign Affiliate Lending in the Crisis

SSRN Electronic Journal, 2000

Research paper thumbnail of Welfare Implications of the Design of an Asymmetric Currency Union with Output Persistence

Consideration is given to how the welfare of the Member countries of a currency union is affected... more Consideration is given to how the welfare of the Member countries of a currency union is affected by asymmetric national output shocks. It is shown that relatively small member countries favour a situation where the group of national central bank presidents is in a strong position while large countries prefer decisions to be taken by the central- bank board. The

Research paper thumbnail of Der Informationsgehalt des Geldmengenziels der Deutschen Bundesbank-Ergebnisse einer Umfrage aus dem Jahr 1998

The German central bank, Deutsche Bundesbank, conducted monetary targeting until the end of the y... more The German central bank, Deutsche Bundesbank, conducted monetary targeting until the end of the year 1998. By the announcement of a monetary target, the central bank wanted to inform the public of its monetary stance. If the information-transmisson process has been successful, I checked by the use of a survey. In the survey, I questioned research institutes, large enterprises, unions

Research paper thumbnail of China's growing importance for German investment

Research paper thumbnail of The discontinuous integration of Western Europe's heterogeneous market for corporate control from 1995 to 2007

As, in Europe, many institutional reforms have been undertaken to establish an economic union, it... more As, in Europe, many institutional reforms have been undertaken to establish an economic union, it can be expected that the relevance of borders has decreased over time. For the EU 15, we investigate the expected integration process of the market for corporate control - an illustrative market for studying integration issues - over the period from 1995 to 2007. Our

Research paper thumbnail of Cross-border bank lending, risk aversion and the financial crisis

This study investigates the determinants of adjustments in the provision of cross-border loans by... more This study investigates the determinants of adjustments in the provision of cross-border loans by internationally active banks. For the period from 2002 to 2010, we look at quarterly transaction data (excluding valuation effects) on long-term loans issued by the largest 69 German banking groups to the private sector of 66 countries. We show that the parent bank's lending adjustment is

Research paper thumbnail of Welfare Implications of the Design of a Currency Union in Case of Member Countries of Different Sizes and Output Persistence

In the study, the relevance of several optimum-currency-area (OCA) criteria is formally worked ou... more In the study, the relevance of several optimum-currency-area (OCA) criteria is formally worked out in a welfare approach. The optimum monetary-policy rules of the supranational central bank are derived within the Barro-Gordon framework, and consideration is given to how the welfare of the member countries of a currency union is affected by symmetric and asymmetric national output shocks. The welfare

Research paper thumbnail of Exchange Rate Volatility and International Trade - Some GARCH Estimations Stress the Importance of Trade Diversification

This paper investigates the impact of short-run volatility of exchange rates on the volume of exp... more This paper investigates the impact of short-run volatility of exchange rates on the volume of exports. After a brief introduction of the underlying theories, the relationship between these two variables is estimated. In the regression, the conditional variance of the nominal-effective-exchange rate is the measure of uncertainty (GARCH estimation). The estimation differs from previous studies especially with respect to the

Research paper thumbnail of Same as it ever was? Europe's national borders and the market for corporate control

Journal of International Money and Finance, 2014