No abstract

Policy, Uncertainty, Investment, Growth, E50, D80, E22, O40,

The paper attempts to investigate the factors determine the level of foreign banking activity in Pakistan in context of central banks policy framework for the period 1973-2008. Greater emphasis is given to examine the factors, responsible for the influence of foreign banking activity in Pakistan in short run and long run time frame work. The outcomes clearly indicate that market size, trade and corporate financing are the main activities of foreign banks and foreign banks mainly concentrate in trade financing with highly concentrating on export financing activities of their home country. The entry and existence of foreign banks can make domestic banks competitive and efficient. Pakistan may acquire benefits with the growth of foreign banks by improving their efficiency, competitiveness and trade financing activities.