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Volume 21, Number 3 / September 2017 , Pages 133-210
 
Multinational Finance Journal, 2017, vol. 21, no. 3, pp. 133-175
Liviu Voinea , Bucharest University of Economic Studies, Romania
Ana-Maria Cazacu , National Bank of Romania, Romania    Corresponding Author
Florian Neagu , National Bank of Romania, Romania

Abstract:
This paper looks at the largest credit institutions from Central and East European countries to better understand the role of expatriates and of other top management team’s characteristics for banks’ risk profile, strategies and lending activity. The results find that credit institutions with expatriate chief executive officers or larger share of expatriates in the top management team are more risk-takers, as indicated by alternative measures of risk (loan-to-deposit ratio, share of risk weighted assets and provisions for loan losses in total assets). On the other hand, banks managed by expatriates and more interconnected with the parent financial institution or other related parties tend to deliver more credit to companies and households (as share in total assets).

Keywords : banks; expatriates; top management teams; risk; CEE countries
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Multinational Finance Journal, 2017, vol. 21, no. 3, pp. 177-210
Maria Eleni Agoraki , Athens University of Economics and Business & Panteion University, Greece    Corresponding Author
Anastasios Tsamis , Panteion University, Greece

Abstract:
This paper investigates the effect of bank-specific, industry-specific and macroeconomic determinants, as well as the regulatory environment on the profitability of emerging European banking sector over the period 2000-2016. Banks in countries with higher capital requirements, market discipline and more restrictions on banking activities performed better, while the better-performing banks had excessive foreign ownership. Using dynamic frameworks, the empirical analysis reveals that performance is affected by bank-specific determinants like equity capital and bank size, while traditional activities lead to increased profitability. Obviously, the specific measures of economic policy must be oriented towards specific aspects of banking business. This is likely to set new standards in performance and efficiency, making bank management to address particular firm-specific issues, such as the composition of the balance sheet, the quality of the credit portfolio, as well as the range of financial products and services. Overall, our evidence shows that regulation, and balance sheets are all helpful in understanding bank profitability during the crisis.

Keywords : banking sector profitability; financial crisis; regulatory framework; emerging markets
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