TY - CEPII
A1 - Olena Havrylchyk
A1 - Emilia Jurzyk
TI - International Exposure of French Banks: Balancing Opportunities and Risks
IS - 273
T3 - La lettre du CEPII
KW - FRANCE
KW - BANKING SYSTEM
KW - CRISIS
KW - CONTAGION
N2 - As a number of European banks was touched by the American subprime crisis, there is a new urgency to consider the pros and cons of the ongoing globalization of the banking sector. In this letter, we aim to describe foreign exposures of French banks and compare them to the situation in other developed countries. Foreign subsidiaries and branches of French banks have brought them new sources of profits. However, these profits appear to be more modest when we consider higher risks of investing in countries with unfamiliar cultures, poor quality of institutions and uncertain business environment. In addition, the globalization of banking has diminished the benefits of diversification and has increased the risks of contagion.
ER -