The Impact of the Global Financial Crisis on Banking Globalization

Although cross-border bank lending has fallen sharply since the crisis, extending our bank ownershipdatabase from 1995-2009 up to 2013 shows only limited retrenchment in foreign bank presence. Whilebanks from OECD countries reduced their foreign presence (but still represent 89% of foreign bank assets),those from emerging markets and developing countries expanded abroad and doubled their presence.Especially advanced countries hit by a systemic crisis reduced their presence abroad, with far flung andrelatively small investments more likely to be sold. Poorer and slower growing countries host fewer bankstoday, while large investments less likely expanded. Conversely, faster host countries' growth and closenessto potential investors meant more entry. Lending by foreign banks locally grew more than cross-borderbank claims did for the same home-host country combination, and each was driven by different factors.Altogether, our evidence shows that global banking is not becoming more fragmented, but rather is goingthrough some important structural transformations with a greater variety of players and a more regionalfocus.