Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146671
Authors: 
Cetorelli, Nicola
Goldberg, Linda S.
Year of Publication: 
2016
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 772
Abstract: 
Banks have progressively evolved from being standalone institutions to being subsidiaries of increasingly complex financial conglomerates. We conjecture and provide evidence that the organizational complexity of the family of a bank is a fundamental driver of the business model of the bank itself, as reflected in the management of the bank's own balance sheet. Using micro-data on global banks with branch operations in the United States, we show that branches of conglomerates in more complex families have a markedly lower lending sensitivity to funding shocks. The balance sheet management strategies of banks are very much determined by the structure of the organizations the banks belong to. The complexity of the conglomerate can change the scale of the lending channel for a large global bank by more than 30 percent.
Subjects: 
global bank
liquidity
transmission
internal capital market
organization
complexity
JEL: 
E44
F36
G32
Document Type: 
Working Paper

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