Concentration in Cross-Border Banking
11 Pages Posted: 25 Jun 2019
Date Written: June 4, 2019
Cross-border bank credit is dominated by a small number of very sizeable links between banks in one country and borrowers in another. The largest-sized cross-border banking links are mainly between major advanced economies. Concentration increased up until the Great Financial Crisis (GFC) and has abated only slightly since. It is higher for interbank credit than for credit to the non-bank sector. Despite the substantial decline in interbank credit in the aftermath of the GFC, concentration in the interbank segment has remained high.
JEL Classification: G15, F30, G21
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