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Global banks' local presence: a new lens

Author

Listed:
  • Iñaki Aldasoro
  • John Caparusso
  • Yingyuan Chen

Abstract

Banks operate internationally through networks of branches and subsidiaries, also known as foreign banking offices (FBOs). Newly collected system- and entity-level data across two dozen host countries confirm stylised facts on these entities' balance sheets and establish new ones. Subsidiaries, which resemble local banks in their focus on domestic currency and retail business, have reduced their share of FBO assets over the past decade, in favour of branches, which are tailored to flexibly provide international services. This shift may raise financial stability concerns, not least because branches' asset growth has been more responsive than subsidiaries' to financial and economic conditions outside host jurisdictions. Judging by the evolution of liquidity and intragroup positions, host supervisors have influenced branches' operations in advanced economies but less so in emerging market ones.

Suggested Citation

  • Iñaki Aldasoro & John Caparusso & Yingyuan Chen, 2022. "Global banks' local presence: a new lens," BIS Quarterly Review, Bank for International Settlements, March.
    • Handle: RePEc:bis:bisqtr:2203d
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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