Abstract
The present paper investigates functional relationship between the parent companies and their subsidiaries, the Czech banks. The aim of this study is to examine if there are relationships between net interest margin of foreign parent companies and our selected variables of their Czech subsidiaries. We are using GMM regression with annual data in panels from the period 2005 – 2010. We confirm that there are some significant relationships between net interest income of foreign parent's and the both amount of gross loans and total deposits of their subsidiaries. In addition, we show the ways how it is possible for parent«s to get some cash flows from the Czech banking sector. We make also monetary policy implications for the Czech National Bank, then.
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