{"title":"Global banks and the picking order in internal capital markets: Do locational activity patterns matter?","authors":"Carmela D’Avino","doi":"10.1016/j.intfin.2024.102083","DOIUrl":null,"url":null,"abstract":"<div><div>This paper examines whether global banks’ liquidity reallocations via internal capital markets are driven by the locational activity patterns of their foreign branches. Using aggregated data of foreign branches of US global banks located in 52 countries, we advance evidence of a picking order that favors locations where branches are more heavily engaged in lending activities. Specifically, we find that internal liquidity support to branches in host countries with prominent local lending activities is especially significant during a contraction in local deposits.</div><div>In jurisdictions where branches have higher shares of market-based activities and off-balance sheet exposures, we do not observe a significant increase in internal liquidity support following local funding contractions.</div></div>","PeriodicalId":48119,"journal":{"name":"Journal of International Financial Markets Institutions & Money","volume":"97 ","pages":"Article 102083"},"PeriodicalIF":5.4000,"publicationDate":"2024-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of International Financial Markets Institutions & Money","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1042443124001495","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This paper examines whether global banks’ liquidity reallocations via internal capital markets are driven by the locational activity patterns of their foreign branches. Using aggregated data of foreign branches of US global banks located in 52 countries, we advance evidence of a picking order that favors locations where branches are more heavily engaged in lending activities. Specifically, we find that internal liquidity support to branches in host countries with prominent local lending activities is especially significant during a contraction in local deposits.
In jurisdictions where branches have higher shares of market-based activities and off-balance sheet exposures, we do not observe a significant increase in internal liquidity support following local funding contractions.
期刊介绍：
International trade, financing and investments, and the related cash and credit transactions, have grown at an extremely rapid pace in recent years. The international monetary system has continued to evolve to accommodate the need for foreign-currency denominated transactions and in the process has provided opportunities for its ongoing observation and study. The purpose of the Journal of International Financial Markets, Institutions & Money is to publish rigorous, original articles dealing with the international aspects of financial markets, institutions and money. Theoretical/conceptual and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • International financial markets • International securities markets • Foreign exchange markets • Eurocurrency markets • International syndications • Term structures of Eurocurrency rates • Determination of exchange rates • Information, speculation and parity • Forward rates and swaps • International payment mechanisms • International commercial banking; • International investment banking • Central bank intervention • International monetary systems • Balance of payments.
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