| Abstract: |
Although cross-border bank lending has fallen sharply since the crisis,
extending our bank ownership database from 1995-2009 up to 2013 shows only
limited retrenchment in foreign bank presence. While banks from OECD countries
reduced their foreign presence (but still represent 89% of foreign bank
assets), those from emerging markets and developing countries expanded abroad
and doubled their presence. Especially advanced countries hit by a systemic
crisis reduced their presence abroad, with far flung and relatively small
investments more likely to be sold. Poorer and slower growing countries host
fewer banks today, while large investments less likely expanded. Conversely,
faster host countries’ growth and closeness to potential investors meant more
entry. Lending by foreign banks locally grew more than cross-border bank
claims did for the same home-host country combination, and each was driven by
different factors. Altogether, our evidence shows that global banking is not
becoming more fragmented, but rather is going through some important
structural transformations with a greater variety of players and a more
regional focus. |