Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162189
Authors: 
Mirdala, Rajmund
Year of Publication: 
2016
Series/Report no.: 
FIW Working Paper 173
Abstract: 
This paper contributes to the understanding of the international financial linkages created by US banks by looking at the geographical composition and structure of the balance sheet of foreign branches. The empirical investigation, which is based on a novel dataset containing balance sheet statistics of foreign branches by country of location, has a threefold objective. First, it provides geographical mapping and distribution of foreign activities of branches by host country by accounting also for those balance sheet items not included in the available international banking statistics, i.e. gross interoffice positions and transactions with third-countries. Secondly, this paper presents a classification of host countries by balance sheet structure of foreign offices. A partioning-based clustering analysis allows to identify 4 distinct types of foreign branches: liquidity importers, liquidity exporters, liquidity conduits and locally implanted. Lastly, the paper provides evidence in support of the fact that US branchesĀ“ banking foreign operations are a good measure of financial integration with US as they can significantly explain business cycle synchronisation between the host country and the US during the Great Recession.
Subjects: 
current account
real exchange rate
economic crisis
vector autoregression
impulse-response function
variance decomposition
JEL: 
C32
F32
F41
Document Type: 
Working Paper

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