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The impact of competition on the operations of foreign banks in Australia in the post-deregulation period
Journal article   Peer reviewed

The impact of competition on the operations of foreign banks in Australia in the post-deregulation period

April Wright
Journal of International Financial Markets, Institutions and Money, Vol.12(4-5), pp.359-375
2002
url
https://doi.org/10.1016/S1042-4431(02)00019-7View
Published Version

Abstract

foreign banks competition Australia
In 1985, Australia removed its long-standing embargo on the entry of foreign banks. The Australian market therefore provides an opportunity to study the factors influencing multinational bank expansion in a new host country. This paper tests a model of the size of multinational banking operations in Australia in the post-embargo period. One major finding is that a push for market share in a highly competitive environment led to risky lending practices in the global boom-bust economic climate of the late 1980s, which adversely affected the foreign banks' performance. Another is that competition from home country banks had a significantly negative effect on foreign banks' asset volumes.

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