The Global Banking Network in the Aftermath of the Crisis: Is There Evidence of De-globalization?
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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.
Series:
Working Paper No. 2017/232
Subject:
Banking Cross-border banking Economic and financial statistics Financial institutions Financial services Financial statistics Foreign banks International banking Offshore financial centers
English
Publication Date:
November 7, 2017
ISBN/ISSN:
9781484324868/1018-5941
Stock No:
WPIEA2017232
Pages:
45
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