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Measuring Global Bank Complexity

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Abstract

Paraphrasing a famous Supreme Court opinion: “I know bank complexity when I see it.” This expression probably speaks to the truth that, if we look at a given banking organization, we ought to be able to state whether it is more or less “complex.” And yet, such an approach hardly offers any guidance if one wants to understand the intricacies of global banks and to monitor and regulate them. What should be the appropriate metrics? It seems to us that there is not a consensus just yet on what complexity might mean in the context of banking. The global dimension of a bank adds many layers, so focusing on global banks is bound to yield a more comprehensive take on the issue than examining purely domestic banking entities. Therefore, in this piece, we view complexity through the lens of the operations of global banks.

Suggested Citation

  • Nicola Cetorelli & Linda S. Goldberg & Arun Gupta, 2014. "Measuring Global Bank Complexity," Liberty Street Economics 20140331, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:86933
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    Cited by:

    1. Lumsdaine, R.L. & Rockmore, D.N. & Foti, N.J. & Leibon, G. & Farmer, J.D., 2021. "The intrafirm complexity of systemically important financial institutions," Journal of Financial Stability, Elsevier, vol. 52(C).
    2. Abad, Jorge & D’Errico, Marco & Killeen, Neill & Luz, Vera & Peltonen, Tuomas & Portes, Richard & Urbano, Teresa, 2022. "Mapping exposures of EU banks to the global shadow banking system," Journal of Banking & Finance, Elsevier, vol. 134(C).
    3. Flood, Mark D. & Kenett, Dror Y. & Lumsdaine, Robin L. & Simon, Jonathan K., 2020. "The Complexity of Bank Holding Companies: A Topological Approach," Journal of Banking & Finance, Elsevier, vol. 118(C).
    4. Cuong, Ly Kim, 2021. "Are financial holding companies' subsidiaries riskier than bank holding companies’ affiliates?," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 1025-1033.
    5. Cardozo, Pamela & Morales-Acevedo, Paola & Murcia, Andrés & Rosado, Alejandra, 2022. "Does the geographical complexity of the Colombian financial conglomerates increase banks’ risk? The role of diversification, regulatory arbitrage, and funding costs," Journal of Banking & Finance, Elsevier, vol. 134(C).
    6. Phung, Quang Thanh & Van Vu, Huong & Tran, Huy Phuoc, 2022. "Do non-performing loans impact bank efficiency?," Finance Research Letters, Elsevier, vol. 46(PB).
    7. Sikochi, Anywhere, 2020. "Corporate legal structure and bank loan spread," Journal of Corporate Finance, Elsevier, vol. 64(C).
    8. Lebastard, Laura, 2022. "Organisational structure as a driver of mergers and acquisitions in the European banking sector," Working Paper Series 2674, European Central Bank.
    9. Martynova, Natalya & Vogel, Ursula, 2022. "Banks’ complexity-risk nexus and the role of regulation," Journal of Banking & Finance, Elsevier, vol. 134(C).
    10. Argimón, Isabel & Rodríguez-Moreno, María, 2022. "Risk and control in complex banking groups," Journal of Banking & Finance, Elsevier, vol. 134(C).
    11. Chernobai, Anna & Ozdagli, Ali & Wang, Jianlin, 2021. "Business complexity and risk management: Evidence from operational risk events in U.S. bank holding companies," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 418-440.
    12. Tran Manh Ha & Doan Ngoc Thang, 2023. "Economic sanction and global sourcing complexity: A cross‐country analysis," The World Economy, Wiley Blackwell, vol. 46(4), pages 1017-1050, April.
    13. Marinelli, Giuseppe & Nobili, Andrea & Palazzo, Francesco, 2022. "The multiple dimensions of bank complexity: Effects on credit risk-taking," Journal of Banking & Finance, Elsevier, vol. 134(C).
    14. Pham, Thi Hoang Anh & Doan, Ngoc Thang, 2023. "Global bank complexity and financial fragility around the world," Economic Systems, Elsevier, vol. 47(1).
    15. Duqi, Andi & McGowan, Danny & Onali, Enrico & Torluccio, Giuseppe, 2021. "Natural disasters and economic growth: The role of banking market structure," Journal of Corporate Finance, Elsevier, vol. 71(C).
    16. Matthieu Bussière & Baptiste Meunier & Justine Pedrono, 2020. "Heterogeneity in Bank Leverage: the Funding Channels of Complexity," Working papers 771, Banque de France.
    17. Aldasoro, Iñaki & Hardy, Bryan & Jager, Maximilian, 2022. "The Janus face of bank geographic complexity," Journal of Banking & Finance, Elsevier, vol. 134(C).
    18. Zheng, Yi, 2020. "Does bank opacity affect lending?," Journal of Banking & Finance, Elsevier, vol. 119(C).

    More about this item

    Keywords

    Global banking; Banks; Complexity;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • F00 - International Economics - - General - - - General

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