The Geography of Dollar Funding of Non-US Banks

12 Pages Posted: 29 Jan 2019

See all articles by Iñaki Aldasoro

Iñaki Aldasoro

Bank for International Settlements (BIS)

Torsten Ehlers

Bank for International Settlements (BIS)

Date Written: December 1, 2018

Abstract

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

Aldasoro, Iñaki and Ehlers, Torsten, The Geography of Dollar Funding of Non-US Banks (December 1, 2018). BIS Quarterly Review December 2018. Available at SSRN: https://ssrn.com/abstract=3316358

Iñaki Aldasoro (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Torsten Ehlers

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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