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Global monitoring with the BIS international banking statistics

Author

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  • Patrick McGuire
  • Ilhyock Nikola Tarashev

Abstract

This paper illustrates various applications of the BIS international banking statistics. We first compare international bank flows to measures of real activity and liquidity and show that the international banking system is becoming a more important conduit for the transfer of capital across countries. We then use network analysis tools to construct a bird's eye view of the structure of the international banking market and to identify key financial hubs. Linking this information with balance of payments statistics helps to better understand the role of banks in the financing of current account flows, for example the recycling of petrodollars and Asian surpluses. Finally, the paper illustrates how the BIS statistics can be used to analyse internationally active banks' foreign exposures to credit risk and, thus, spot vulnerabilities in the international banking market.

Suggested Citation

  • Patrick McGuire & Ilhyock Nikola Tarashev, 2008. "Global monitoring with the BIS international banking statistics," BIS Working Papers 244, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:244
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    References listed on IDEAS

    as
    1. Patrick McGuire & Nikola Tarashev, 2006. "Tracking international bank flows," BIS Quarterly Review, Bank for International Settlements, December.
    2. Bank for International Settlements, 2003. "Guide to the international financial statistics," BIS Papers, Bank for International Settlements, number 14.
    3. Patrick McGuire, 2004. "A shift in London's eurodollar market," BIS Quarterly Review, Bank for International Settlements, September.
    4. Patrick McGuire & Philip Wooldridge, 2005. "The BIS consolidated banking statistics: structure, uses and recent enhancements," BIS Quarterly Review, Bank for International Settlements, September.
    5. Niehans, Jurg & Hewson, John, 1976. "The Eurodollar Market and Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 8(1), pages 1-27, February.
    6. Philip Wooldridge, 2002. "Uses of the BIS statistics: an introduction," BIS Quarterly Review, Bank for International Settlements, March.
    7. McKinnon, Ronald I., 1979. "Money in International Exchange: The Convertible Currency System," OUP Catalogue, Oxford University Press, number 9780195024098.
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    Citations

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    Cited by:

    1. Spiros Bougheas & Alan Kirman, 2015. "Complex Financial Networks and Systemic Risk: A Review," Dynamic Modeling and Econometrics in Economics and Finance, in: Pasquale Commendatore & Saime Kayam & Ingrid Kubin (ed.), Complexity and Geographical Economics, edition 127, pages 115-139, Springer.
    2. Francis, William B. & Osborne, Matthew, 2012. "Capital requirements and bank behavior in the UK: Are there lessons for international capital standards?," Journal of Banking & Finance, Elsevier, vol. 36(3), pages 803-816.
    3. Marco A. Espinosa‐Vega & Juan Solé, 2011. "Cross‐border financial surveillance: a network perspective," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 3(3), pages 182-205, August.
    4. Avdjiev, S. & Giudici, P. & Spelta, A., 2019. "Measuring contagion risk in international banking," Journal of Financial Stability, Elsevier, vol. 42(C), pages 36-51.
    5. McCauley, Robert N. & Bénétrix, Agustín S. & McGuire, Patrick M. & von Peter, Goetz, 2019. "Financial deglobalisation in banking?," Journal of International Money and Finance, Elsevier, vol. 94(C), pages 116-131.
    6. Hans Degryse & Muhammad Ather Elahi & Maria Fabiana Penas, 2010. "Cross‐Border Exposures and Financial Contagion," International Review of Finance, International Review of Finance Ltd., vol. 10(2), pages 209-240, June.
    7. Monica Dudian & Monica Balcan Maciuca, 2010. "Internal Ratings Systems: An Empirical Approach," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 5(1), pages 71-79, april.
    8. Kanas, Angelos & Molyneux, Philip & Zervopoulos, Panagiotis D., 2023. "Systemic risk and CO2 emissions in the U.S," Journal of Financial Stability, Elsevier, vol. 64(C).
    9. Poelhekke, Steven, 2015. "Do global banks facilitate foreign direct investment?," European Economic Review, Elsevier, vol. 76(C), pages 25-46.
    10. Hyun Song Shin, 2017. "Breaking free of the triple coincidence in international finance," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Statistical implications of the new financial landscape, volume 43, Bank for International Settlements.
    11. Valeria Pellegrini & Enrico Tosti, 2012. "In search of lost capital: an estimation of undeclared portfolio assets," Questioni di Economia e Finanza (Occasional Papers) 131, Bank of Italy, Economic Research and International Relations Area.
    12. Milcheva, Stanimira & Zhu, Bing, 2016. "Bank integration and co-movements across housing markets," Journal of Banking & Finance, Elsevier, vol. 72(S), pages 148-171.
    13. Harrison, Michael & Nakajima, Jouchi & Shabani, Mimoza, 2023. "An evolution of global and regional banking networks: A focus on Japanese banks’ international expansion," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    14. William Vlcek, 2010. "Byways and Highways of Direct Investment: China and the Offshore World," Journal of Current Chinese Affairs - China aktuell, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 39(4), pages 111-142.
    15. Frame, W. Scott & Mihov, Atanas & Sanz, Leandro, 2020. "Foreign Investment, Regulatory Arbitrage, and the Risk of U.S. Banking Organizations," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 55(3), pages 955-988, May.
    16. Everett Grant & Julieta Yung, 2017. "The Double-Edged Sword of Global Integration: Robustness, Fragility & Contagion in the International Firm Network," Globalization Institute Working Papers 313, Federal Reserve Bank of Dallas.
    17. Bank for International Settlements, 2015. "Introduction to BIS statistics," BIS Quarterly Review, Bank for International Settlements, September.
    18. McLemore, Ping & Mihov, Atanas & Sanz, Leandro, 2022. "Global banks and systemic risk: The dark side of country financial connectedness," Journal of International Money and Finance, Elsevier, vol. 129(C).
    19. Mr. Gian M Milesi-Ferretti & Ms. Natalia T. Tamirisa & Mr. Francesco Strobbe, 2010. "Bilateral Financial Linkages and Global Imbalances: a View on The Eve of the Financial Crisis," IMF Working Papers 2010/257, International Monetary Fund.
    20. Kamin, Steven B. & DeMarco, Laurie Pounder, 2012. "How did a domestic housing slump turn into a global financial crisis?," Journal of International Money and Finance, Elsevier, vol. 31(1), pages 10-41.
    21. Hans Degryse & Muhammad Ather Elahi & Maria Fabiana Penas, 2010. "Cross‐Border Exposures and Financial Contagion," International Review of Finance, International Review of Finance Ltd., vol. 10(2), pages 209-240, June.
    22. Kubelec, Chris & Sa, Filipa, 2010. "The geographical composition of national external balance sheets: 1980-2005," Bank of England working papers 384, Bank of England.
    23. Steven Poelhekke, 2016. "Financial Globalization and Foreign Direct Investment," Tinbergen Institute Discussion Papers 16-098/VIII, Tinbergen Institute.
    24. Alesia Kalbaska, 2013. "From Sovereigns to Banks: Evidence on Cross-border Contagion (2006-2011)," Department of Economics University of Siena 680, Department of Economics, University of Siena.
    25. Everett Grant & Julieta Yung, 2021. "The double‐edged sword of global integration: Robustness, fragility, and contagion in the international firm network," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(6), pages 760-783, September.

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    Keywords

    international banking; foreign exposures; offshore centres; stress testing; petrodollars; Asian surplus;
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