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Cross-border financial centres

Author

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  • Pamela Pogliani
  • Philip Wooldridge

Abstract

Financial centres that cater predominantly to non-residents – which we refer to as cross-border financial centres (XFCs) –are important intermediaries of cross-border financial flows. For analysing capital flows and international interconnectedness, it can be useful to distinguish countries that are home to XFCs from other countries. We improve on previous methodologies for identifying such centres by constructing a measure focussed on the intermediation activity inherent to XFCs and explicitly taking into account the non-normal distribution of this measure across countries when detecting outliers. We also minimise volatility in the set of countries identified as XFCs over time by de-trending the data and pooling years. Our methodology identifies a core set of 12 countries as XFCs over the 1995-2020 period, but the countries vary with time and different measures of activity.

Suggested Citation

  • Pamela Pogliani & Philip Wooldridge, 2022. "Cross-border financial centres," BIS Working Papers 1035, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1035
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    References listed on IDEAS

    as
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    4. Pamela Pogliani & Goetz von Peter & Philip Wooldridge, 2022. "The outsize role of cross-border financial centres," BIS Quarterly Review, Bank for International Settlements, June.
    5. Jose Antonio Alonso & Ana Luiza Cortez & Stephan Klasen, 2014. "LDC and other country groupings: How useful are current approaches to classify countries in a more hetergeneous developing world?," CDP Background Papers 021, United Nations, Department of Economics and Social Affairs.
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    More about this item

    Keywords

    international financial centres; offshore banks; outlier detection;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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