Global Banks' Dynamics and the International Transmission of Shocks

Stefania Garetto, Martin Goetz and Jose Fillat

No 1333, 2014 Meeting Papers from Society for Economic Dynamics

Abstract: 15% of the loans in the US are held by foreign banking institutions, headquartered in more than 50 countries. Using bank-level data, we present novel stylized facts describing characteristics of foreign institutions and compare them to the incumbent set of banks, distinguishing foreign banks by their mode of entry. We incorporate these facts into a structural model of entry in the banking sector where profit maximizing foreign banks decide whether and how to enter a foreign market. The model sheds light on the relationship between market access, capital flows, regulation, and entry, and has implications for the risk exposure that different organizational forms entail.

Date: 2014
New Economics Papers: this item is included in nep-ban and nep-ifn
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed014:1333

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