Research on the Policy Environment on the Risk of Multinational Banks - Based on the Analysis of Regional Regulatory Policies and Multinational Banks

DOI

10.2991/978-94-6463-052-7_5How to use a DOI?

Keywords

Multinational Banks; Regional Regulatory Policies; Regression Analysis; Financial Crisis

Abstract

The existing financial regulatory framework makes it difficult to effectively regulate international banking as international financial services continue to innovate. Banks also tend to establish more branches and lend more to countries with less stringent regulations, which makes cross-border banks more risky. Previous research has been inadequate because regulatory policies are difficult to measure and aggregate. This paper examines the drawbacks of regional regulation and the risks of international banks. The research methodology is using regression analysis to examine the relationship between the number of US Bank Holding Company (BHC) in countries with different regulatory metrics, and the correlation between loans, deposits and real estate loans. The results of the study are as follows, due to decentralised regulation with different regulatory indicators across countries, the impact of regulations on the number of BHCs is minimal, and US BHC are more diverse and riskier in countries with weaker regulatory frameworks. During the financial crisis, loans and deposits to US BHC trended negatively and were strongly correlated. The business of BHC has been affected by the degree of regulation in the countries where they are regulated, and the long-term effects of financial crisis. Therefore, reforms in financial regulation can effectively reduce the risks posed by overseas BHCs. There should be greater cooperation between domestic and international regulation, and greater transparency in the operations of regulators and multinational institutions, as well as attention to the risks of emerging areas of fintech. The risks of financial globalization can be minimized through fair and comprehensive regulation.

Copyright

© 2022 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Ge Yan
PY  - 2022
DA  - 2022/12/27
TI  - Research on the Policy Environment on the Risk of Multinational Banks - Based on the Analysis of Regional Regulatory Policies and Multinational Banks
BT  - Proceedings of the 2022 International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2022)
PB  - Atlantis Press
SP  - 29
EP  - 37
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-052-7_5
DO  - 10.2991/978-94-6463-052-7_5
ID  - Yan2022
ER  -