De-internationalizing Global Banking?
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This article discusses two models of global banking, the multinational model and the international model. The global financial crisis demonstrated the greater resilience of the multinational model to strains in the wholesale funding markets. This article reviews long-term trend in global banking toward multinational banking and how the global financial crisis reinforced this trend. In addition, this article discusses regulatory and supervisory changes since the crisis that require liquidity to be held in particular jurisdictions, and affiliates to be operating subsidiaries rather than branches. Regulators in major jurisdictions are showing welcome resistance to the natural temptation to tilt the scale toward multinational banking.
KeywordsGlobal banks multinational banking bank regulation subsidiarization liquidity regulation
JEL ClassificationsF23 F3 G21 K23
The author thanks Bill Coen, Ben Cohen, Pat McGuire and Goetz von Peter for discussion. Views expressed are those of the author and not necessarily those of the Bank for International Settlements.
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