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Global Banks and the Transmission of Shocks across Borders

Author

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  • Deyan Radev

    (Sofia University, Faculty of Economics and Business Administration)

Abstract

In this study, we explore the impact of solvency and wholesale funding shocks on the lending behavior of 84 OECD parent banks and their 375 foreign subsidiaries. Our findings indicate that solvency shocks play a more significant role than wholesale funding shocks in influencing subsidiary lending. Moreover, we observe that solvency shocks have a heightened impact on larger subsidiary banks operating in mature markets with limited growth opportunities. These results carry substantial theoretical and policy implications, contributing to a deeper understanding of how solvency and wholesale shocks traverse borders and affect the lending dynamics of global banking entities.

Suggested Citation

  • Deyan Radev, 2024. "Global Banks and the Transmission of Shocks across Borders," Bulgarian Economic Papers bep-2024-02, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski, revised Jan 2024.
    • Handle: RePEc:sko:wpaper:bep-2024-02
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Commercial banks; global banks; wholesale shocks; solvency shocks; transmission; internal capital markets;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • 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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