Internal capital market practices of multinational banks evidence from south africa

Pelletier, Adeline. 2018. Internal capital market practices of multinational banks evidence from south africa. Journal of Banking and Finance, 90, pp. 131-145. ISSN 0378-4266 [Article]

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Abstract or Description

This paper examines how internal capital flows inside multinational banks create global financial interconnections, relying on a novel database on foreign banks operating in South Africa. Using the event of the East Asian crisis, I find that foreign affiliates’ balance sheet face “reversal of fortune” when other members of their banking group need large amounts of internal capital to cushion capital losses, leading to an abrupt reallocation of internal capital across countries. At the same time, an increase of the volume of internal funding received is shown to cause an expansion of credit to the local private sector.

Item Type:


Identification Number (DOI):


Internal capital markets; Multinational banks; Crisis transmission; Credit supply

Departments, Centres and Research Units:

Institute of Management Studies


1 May 2018Published
30 March 2018Published Online
20 March 2018Accepted

Item ID:


Date Deposited:

09 Apr 2018 10:42

Last Modified:

11 Jun 2021 13:01

Peer Reviewed:

Yes, this version has been peer-reviewed.


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