Bank Lending, Crises and Changing Ownership Structure in Central and Eastern European Countries

We examine the interactions of bank lending dynamics, ownership structures and crisis phenomena in the banking systems of Central and Eastern European (CEE) countries. Using a panel dataset of more than 400 banks for the period from 1994 to 2010, we show that the impact of ownership structure on a bank's lending activities in CEE countries was conditional upon the type of a crisis, namely, whether it was a host, home, global or simultaneous crisis. In contrast, our evidence indicates that bank-specific characteristics, such as deposit growth and profitability ratios, are important determinants of credit growth during both normal economic times and crisis periods, regardless of crisis type. Moreover, we provide some indirect evidence of the benefits of banking sector diversification according to the criterion of parent banks' country of origin