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After the global financial crisis: From international to multinational banking?

Author

Listed:
  • McCauley, Robert
  • McGuire, Patrick
  • von Peter, Goetz

Abstract

The financial crisis has led to a reconsideration of banks’ global business models. Using a dataset derived from the BIS banking statistics, this paper studies the geography of global banking. It distinguishes between “international” and “multinational” banks, their respective funding models and the associated degree of centralisation in their operations. As a result of post-crisis regulatory reform, the long-term trend toward local banking is likely to accelerate, especially if liquidity regulations are applied locally.

Suggested Citation

  • McCauley, Robert & McGuire, Patrick & von Peter, Goetz, 2012. "After the global financial crisis: From international to multinational banking?," Journal of Economics and Business, Elsevier, vol. 64(1), pages 7-23.
  • Handle: RePEc:eee:jebusi:v:64:y:2012:i:1:p:7-23
    DOI: 10.1016/j.jeconbus.2011.06.004
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    References listed on IDEAS

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    1. Niall Coffey & Warren B. Hrung & Asani Sarkar, 2009. "Capital constraints, counterparty risk, and deviations from covered interest rate parity," Staff Reports 393, Federal Reserve Bank of New York.
    2. de Haas, Ralph & van Lelyveld, Iman, 2010. "Internal capital markets and lending by multinational bank subsidiaries," Journal of Financial Intermediation, Elsevier, vol. 19(1), pages 1-25, January.
    3. Gabriele Galati & Alexandra Heath & Patrick McGuire, 2007. "Evidence of carry trade activity," BIS Quarterly Review, Bank for International Settlements, September.
    4. Baba, Naohiko & Packer, Frank, 2009. "From turmoil to crisis: Dislocations in the FX swap market before and after the failure of Lehman Brothers," Journal of International Money and Finance, Elsevier, vol. 28(8), pages 1350-1374, December.
    5. Giorgio Barba Navaretti & Giacomo Calzolari & Alberto Franco Pozzolo & Micol Levi, 2010. "Multinational banking in Europe - financial stability and regulatory implications: lessons from the financial crisis," Economic Policy, CEPR;CES;MSH, vol. 25, pages 703-753, October.
    6. Goldberg, Linda & Tille, Cédric, 2009. "Macroeconomic interdependence and the international role of the dollar," Journal of Monetary Economics, Elsevier, vol. 56(7), pages 990-1003, October.
    7. Robert Z. Aliber, 1993. "The Multinational Paradigm," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511517, January.
    8. Patrick McGuire & Goetz von Peter, 2009. "The US dollar shortage in global banking and the international policy response," BIS Working Papers 291, Bank for International Settlements.
    9. Jacob Gyntelberg & Eli M Remolona, 2007. "Risk in carry trades: a look at target currencies in Asia and the Pacific," BIS Quarterly Review, Bank for International Settlements, December.
    10. Robert N McCauley & Jenz Zukunft, 2008. "Asian banks and the international interbank market," BIS Quarterly Review, Bank for International Settlements, June.
    11. Pokutta, Sebastian & Schmaltz, Christian, 2011. "Managing liquidity: Optimal degree of centralization," Journal of Banking & Finance, Elsevier, vol. 35(3), pages 627-638, March.
    12. Ingo Fender & Patrick McGuire, 2010. "Bank structure, funding risk and the transmission of shocks across countries: concepts and measurement," BIS Quarterly Review, Bank for International Settlements, September.
    13. Charles Goodhart & Dirk Schoenmaker, 2009. "Fiscal Burden Sharing in Cross-Border Banking Crises," International Journal of Central Banking, International Journal of Central Banking, vol. 5(1), pages 141-165, March.
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    Citations

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    Cited by:

    1. Amiti, Mary & McGuire, Patrick M. & Weinstein, David E., 2017. "Supply- and demand-side factors in global banking," Staff Reports 818, Federal Reserve Bank of New York.
    2. Leonardo Gambacorta & Stefano Schiaffi & Adrian Van Rixtel, 2017. "Changing business models in international bank funding," Working Papers 1736, Banco de España;Working Papers Homepage.
    3. Niepmann, Friederike, 2015. "Banking across borders," Journal of International Economics, Elsevier, vol. 96(2), pages 244-265.
    4. Torsten Ehlers & Agustín Villar, 2015. "The role of banks," BIS Papers chapters,in: Bank for International Settlements (ed.), What do new forms of finance mean for EM central banks?, volume 82, pages 9-40 Bank for International Settlements.
    5. Degl’Innocenti, Marta & Matousek, Roman & Sevic, Zeljko & Tzeremes, Nickolaos G., 2017. "Bank efficiency and financial centres: Does geographical location matter?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 46(C), pages 188-198.
    6. Brei, Michael & Gambacorta, Leonardo & von Peter, Goetz, 2013. "Rescue packages and bank lending," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 490-505.
    7. Borio, Claudio & Gambacorta, Leonardo, 2017. "Monetary policy and bank lending in a low interest rate environment: Diminishing effectiveness?," Journal of Macroeconomics, Elsevier, vol. 54(PB), pages 217-231.
    8. Patrick McGuire & Goetz von Peter, 2016. "The resilience of banks' international operations," BIS Quarterly Review, Bank for International Settlements, March.
    9. Narendar Rao & K. Reddy, 2015. "The impact of the global financial crisis on cross-border mergers and acquisitions: a continental and industry analysis," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 309-341, December.
    10. repec:bla:intfin:v:20:y:2017:i:1:p:48-63 is not listed on IDEAS
    11. Claudio Borio & Leonardo Gambacorta & Boris Hofmann, 2017. "The influence of monetary policy on bank profitability," International Finance, Wiley Blackwell, vol. 20(1), pages 48-63, March.
    12. Ma, Guonan & McCauley, Robert N., 2013. "Is China or India more financially open?," Journal of International Money and Finance, Elsevier, vol. 39(C), pages 6-27.
    13. Robert N. McCauley & Agustín S. Bénétrix & Patrick M. McGuire & Goetz von Peter, 2017. "Financial deglobalisation in banking?," Trinity Economics Papers tep1717, Trinity College Dublin, Department of Economics.
    14. Teresa Czerwinska, 2015. "Recovery and Resolution – New Mechanisms for Systemic Risk Management in the Insurance Sector (Restrukturyzacja i uporzadkowana likwidacja – jako nowe instrumenty zarzadzania ryzykiem systemowym w sek," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 13(55), pages 220-236.
    15. Stefan Avdjiev & Patrick McGuire & Philip Wooldridge, 2015. "Enhanced data to analyse international banking," BIS Quarterly Review, Bank for International Settlements, September.

    More about this item

    Keywords

    Multinational banking; Global banks; Local operations; Regulatory reform; Basel III; Liquidity regulation;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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