Two developments stand out among the changes in international banking since the global financial crisis. First, direct cross-border lending as a share of total banking assets has declined, mostly because of the retrenchment of European banks. Second, the share of local lending by foreign bank affiliates has remained steady. Global banks in particular have refocused their activities on some key markets, leaving space for other banks to expand. As a result, intraregional financial linkages have deepened, especially in Asia.

Contributor Notes

Prepared by Frederic Lambert (team leader), Pragyan Deb, Johannes Ehrentraud, Brenda González-Hermosillo, Hibiki Ichiue, Oksana Khadarina, Win Monroe, Hiroko Oura, Martin Saldías, and Kai Yan, with contributions from John Bluedorn and Alexandra Peter, under the overall guidance of Gaston Gelos and Dong He.
Navigating Monetary Policy Challenges and Managing Risks