{
  "title": "The Global Banking Network: What is Behind the Increasing Regionalization Trend?",
  "publication": "IMF Working Papers, March 9, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/03/09/the-global-banking-network-what-is-behind-the-increasing-regionalization-trend-45682",
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  "summary": "This paper analyses the nature of the increasing regionalization process in global banking. Despite the large decline in aggregate cross-border banking lending volumes, some parts of the global banking network are currently more interlinked regionally than before the Global Financial Crisis.",
  "sections": [
    {
      "heading": "Main findings",
      "content": "- Despite the large decline in aggregate cross-border banking lending volumes, some parts of the global banking network are currently more interlinked regionally than before the Global Financial Crisis.\n- The regionalization trend is present even after controlling for traditional gravitational variables (e.g. distance, language, legal system, etc.).\n- The regionalization trend was present before the GFC, but it has increased since then.\n- The trend is especially pronounced among lenders in EMs and non-core banking systems, such as Australia, Canada, Hong Kong, and Singapore.\n- The regionalization trend seems to be associated with regulatory variables and the opportunities created by the retrenchment of several European lenders."
    },
    {
      "heading": "Methodology and analytic approach",
      "content": "- Developed a simple theoretical model capturing banks' internationalization decisions.\n- Empirical estimation accounts for traditional gravitational variables (e.g. distance, language, legal system, etc.) to isolate regionalization effects."
    },
    {
      "heading": "Drivers and associations",
      "content": "- Decline in aggregate cross-border banking lending volumes coincides with increased regional interlinkages in parts of the network.\n- Regulatory variables are associated with the increase in regionalization.\n- Retrenchment of several European lenders appears to have created opportunities that contributed to regionalization."
    },
    {
      "heading": "Scope and emphasis",
      "content": "- Emphasis on lenders in EMs and non-core banking systems (explicit examples: Australia, Canada, Hong Kong, Singapore).\n- Temporal dimension: regionalization present before the GFC and intensified after the GFC.\n\nSource: Eugenio M Cerutti and Haonan Zhou, \"The Global Banking Network: What is Behind the Increasing Regionalization Trend?\", IMF Working Papers, March 9, 2018.\n\n---\n\n Content in this bundle\n\n- wp1846 — \"13. Peripheral Lenders: Interaction with Global Banks’ Retrenchment\"\n  - wp1846 — \"13. Peripheral Lenders: Interaction with Global Banks’ Retrenchment\" (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1846 — \"13. Peripheral Lenders: Interaction with Global Banks’ Retrenchment\" (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/03/09/the-global-banking-network-what-is-behind-the-increasing-regionalization-trend-45682"
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    "Authors: Eugenio M Cerutti, Haonan Zhou",
    "Published: March 9, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484345177.001",
    "Despite the large decline in aggregate cross-border banking lending volumes, some parts of the global banking network are currently more interlinked regionally than before the Global Financial Crisis.",
    "The regionalization trend is present even after controlling for traditional gravitational variables (e.g. distance, language, legal system, etc.).",
    "The regionalization trend was present before the GFC, but it has increased since then.",
    "The trend is especially pronounced among lenders in EMs and non-core banking systems, such as Australia, Canada, Hong Kong, and Singapore.",
    "The regionalization trend seems to be associated with regulatory variables and the opportunities created by the retrenchment of several European lenders.",
    "Developed a simple theoretical model capturing banks' internationalization decisions.",
    "Empirical estimation accounts for traditional gravitational variables (e.g. distance, language, legal system, etc.) to isolate regionalization effects.",
    "Decline in aggregate cross-border banking lending volumes coincides with increased regional interlinkages in parts of the network.",
    "Regulatory variables are associated with the increase in regionalization.",
    "Retrenchment of several European lenders appears to have created opportunities that contributed to regionalization.",
    "Emphasis on lenders in EMs and non-core banking systems (explicit examples: Australia, Canada, Hong Kong, Singapore).",
    "Temporal dimension: regionalization present before the GFC and intensified after the GFC.",
    "**wp1846 — \"13. Peripheral Lenders: Interaction with Global Banks’ Retrenchment\"**"
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