The Geography of Dollar Funding of Non-US Banks
12 Pages Posted: 29 Jan 2019
Date Written: December 1, 2018
Where do non-US banks obtain the funding for the large amount of US dollars they lend? Traditionally, their branches and subsidiaries in the United States were a major source of dollar funding, but the role of these affiliates has declined. Instead, dollars are increasingly raised in the home country. Where dollar funding is raised, however, is distinct from the location of the funding provider, as cross-border liabilities play a large role. In aggregate, a larger share of dollar funding is provided by US residents than is raised at foreign banks’ US branches and subsidiaries. In the light of these facts, we discuss potential challenges related to the current geography of dollar funding.
JEL Classification: G15, F30, G21
Suggested Citation: Suggested Citation