Bank funding: evolution, stability and the role of foreign offices

John Caparusso and Bryan Hardy

BIS Quarterly Review, 2022

Abstract: The Covid-19 pandemic and the war in Ukraine have furthered a sustained retreat from global banking. The funding sources of local banking systems have shifted from cross-border to local and, within cross-border, from inter-office to unrelated sources. An increased share from local sources could improve the stability of funding, but greater cross-border funding from unrelated sources could be detrimental, as it is more sensitive to global shocks than is inter-office funding. The shift in the funding mix reflects salient differences between the funding models of domestic banking offices, which have been gaining in importance, and foreign banking offices – ie subsidiaries and branches with foreign parents. Furthermore, as individual foreign bank affiliates have withdrawn, the effect has been to increase the nationality concentration in local banking systems, which historically has correlated with higher funding volatility.

JEL-codes: F34 G15 G21 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.bis.org/publ/qtrpdf/r_qt2209f.pdf (application/pdf)
http://www.bis.org/publ/qtrpdf/r_qt2209f.htm (text/html)

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:bis:bisqtr:2209f

Access Statistics for this article

BIS Quarterly Review is currently edited by Christian Upper

More articles in BIS Quarterly Review from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Martin Fessler ().