A Disaggregated Approach To The Analysis Of The Effects Of Foreign Ownership On Bank Performance

Abstract

his paper examines the financial characteristics of foreign-owned U.S. banks with respect to orientation, profitability, efficiency, liquidity and riskiness. A disaggregated approach is used in the paper. Foreign-owned banks are divided into groups according to the nationality of owners, and according to the individual or institutional nature of owners. Our results show that individually-owned banks are most problematic in terms of serving the needs of their local communities, and in terms of risk exposure. British style banks were found to be most similar, and Japanese banks least similar to domestic banks in terms of their orientation.