The Global Banking Network in the Aftermath of the Crisis: Is There Evidence of De-globalization?

November 7, 2017

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Eugenio M Cerutti, and Haonan Zhou. The Global Banking Network in the Aftermath of the Crisis: Is There Evidence of De-globalization?, (USA: International Monetary Fund, 2017) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Post-crisis dynamics show a shrinkage in the overall amount of crossborder bank lending, which has been interpreted in the literature as a retreat in financial globalization. In this paper, we argue that aggregate figures are not sufficient to support such a claim in terms of the overall structure of the global banking network. Based on a systematic approach to measuring, mapping and analyzing financial interconnectedness among countries using network theory, we show that, despite the decline in aggregate lending volumes, the structure of the network has developed increased connections in some dimensions. Some parts of the network are currently more interlinked regionally than before the crisis, and less dependent on major global lenders. In this context, at a more disaggregate level, we document the characteristics of the increasing regionalization of lending flows, the different evolution of linkages through bank affiliates and direct cross-border claims, as well as the shift in the importance of key borrower and lender nodes. These changes in the banking network have important insights in terms of policy implications since they indicate that the global banking network has evolved, but it has not undergone a generalized retrenchment in financial linkages.

Subject: Banking, Cross-border banking, Economic and financial statistics, Financial institutions, Financial services, Financial statistics, Foreign banks, International banking, Offshore financial centers

Keywords: Asia and Pacific, Bank size, Banking Network, Borrower capital account openness, Borrower country, CBS data, Credit-borrower dependence, Cross-border banking, Cross-border Lending, Emerging market, Europe, Exchange rate, Financial Interconnectedness, Financial statistics, Flow process, Foreign banks, Global, International banking, Katz-Bonacich centrality, Lender bank assets, Lender-borrower pair, Offshore financial centers, Regression analysis, WP

Publication Details

Pages:

45
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/232
Stock No:

WPIEA2017232
ISBN:

9781484324868
ISSN:

1018-5941

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