Foreign-owned Banks: (way) Underestimated - and Volatile - Participants in the U.S. Banking Market

Daniel Nolle ()
Additional contact information
Daniel Nolle: Office of the Comptroller of the Currency, Postal: Constitution Center, 400 7th Street, SW, Washington, DC 20024

Journal of Financial Perspectives, 2013, vol. 1, issue 1, 43-57

Abstract: Banking and financial industry participants, analysts, and policy makers appreciate the fact that foreign banks play an important role in the U.S. financial system, but many lack a precise understanding of the size, composition, and impact of the foreign banking sector. In large measure, that vagueness is due to the fact that standard statistical reports on the banking industry, and analyses based on data underlying those reports, have traditionally "under-accounted" for foreign-owned banks in the U.S. The purpose of this study is to explain the nature of this statistical "blind spot," and to suggest how it might best be addressed. The issue is far from trivial. As this study shows, it is crucial from an economic point of view to account fully for foreign-owned banks' presence and activities in the U.S. banking market. That point is driven home by a consideration of the radical changes in foreign banks' U.S. operations over the past decade of extreme turbulence in financial markets. In particular, the study shows that despite the well-documented, large swings in the performance and stability of U.S.-owned domestic banks over the decade surrounding the financial crisis, the volatility of foreign-owned in the U.S. was even more dramatic.

Keywords: Foreign banks; foreign banking; branches and agencies of foreign banks; foreign-owned subsidiary banks; internal capital markets; intra-company funding flows; net due-to balances. (search for similar items in EconPapers)
JEL-codes: G15 G21 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:jofipe:0005

Access Statistics for this article

Journal of Financial Perspectives is currently edited by Ms Alina Stefan

More articles in Journal of Financial Perspectives from EY Global FS Institute 1 More London Place, London SE1 2AF, UK.
Bibliographic data for series maintained by Ms Alina Stefan ( this e-mail address is bad, please contact ).