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Large global banks were at the heart of the global financial crisis. In response to the crisis, the Financial Stability Board published an integrated set of policy measures, such as capital surcharges, to address the systemic and moral hazard risks associated with global systemically important banks (G-SIBs). Almost 10 years later, it is time to take stock of the impact of these measures. This paper answers three questions on what happened to the G-SIBs. First, have they shrunk in size? Second, are they better capitalised? Third, have they reduced their global reach?

This paper looks at the individual G-SIBs and compares the situation before the crisis with the current situation. In this methodology, the differences because of changes at individual banks and changes in the ranking within the group (composition effect) are disentangled. Data have been collected on these banks from SNL Financial (banking database) and annual reports.

First, a substantial increase in capital levels is seen, though the distribution is uneven. China and USA are leading the pact with leverage ratios (Tier 1 capital divided by total assets) of around 7 per cent for their large banks, whereas Europe and Japan are trailing behind with ratios between 4 and 5 per cent. Second, a strong composition effect is identified: a shift of business from the global European banks to the more domestic Asian banks, which are gradually increasing their global reach. The US banks keep their strong position. So, the decline in cross-border banking is largely because of a composition effect (i.e. a reshuffle of the global banking champions league) and far less due to a reduced global reach of individual banks.

From the results on capital, recommendations are made on capital requirements (see below at social implications).

It is noted that the euro area, Japan, Sweden and Switzerland trail behind with a leverage ratio between 4 and 5 per cent. It is recommended these countries bring the leverage ratio of their largest banks more in line with international practice.

The effects of the reform after the global financial crisis on the large global banks have not been researched in detail. This paper split the results by country of incorporation (home country). This gives interesting differences, which the paper relates to specific policies (or lack of policies) in these countries.

This chapter investigates a shock transmission path between a home country (a country where globalized banks’ headquarters are located) and a host country (Indonesia as the emerging market) through the lending channel of global banks’ local branches (i.e., the internal transfer channel). Using novel data of monthly individual foreign bank’s balance sheet in Indonesia, the author finds the evidence that shocks to a parent bank and a home economy are transmitted to a host economy through the foreign banks’ internal capital market. With the Indonesia banks’ capital injections and their difficulty in financing dollar funds without risk premiums since the 1998s crisis, the foreign banks’ dollar lending in Indonesia is a good showcase of internal capital markets. A change in a home stock market index and industrial production appears to have a negative effect on growth rates in foreign currency loans of foreign banks in the host market. On the other hand, high growth rates in the parent bank’s stock price in the home market lead to an increase in foreign banks’ US dollar lending in the host country. This effect does not appear in local currency lending because limited hedging instruments against foreign exchange risk results in immobility of bank capital in the local currency.

The purpose of this paper is to shed further light on international financial linkages created by banks. Typically, the larger the balance sheet exposure a bank has to a counterparty country, the more will be both its risk exposure and sensibility to shocks to this latter. The latest crisis has revealed the importance of filling the existing data gaps which hinder a full understanding of the geographical composition of banks’ balance sheet on a global basis.

This paper, by focusing on US banks, reviews existing data on bilateral foreign positions on both a consolidated and an unconsolidated basis.

The investigation stresses the extent to which new data enhancements are going to enable to a better understanding of the global banking system and discusses other data limitations and gaps which should be addressed. In particular, policy recommendations point to the need to collect more detailed foreign offices-related statistics.

This is the first attempt in the literature to discuss data availability, limitations and policy suggestions regarding international bilateral banking statistics in the USA.

Documents US banks' expansion overseas and stresses that London has, internationally, been an important centre for them in their operations. States also that by early 1979 US banks were the largest bank group in the UK and that by the early 1970s US bank lending to UK manufacturing industry was almost half that of the London clearing banks. Proposes that among large corporate customers US and other foreign banks became preferred as second source banks, with the clearing banks still preferred as the first source. Highlights the vigour with which the US banks will continue to pursue the UK corporate sector – though this will be hard to judge. Says that clearing banks are not under immediate pressure from US/foreign banks but that the threat has galvanized them into attempting to rectify their market position. Concludes that the revival of US domestic loan demand has given the US banks an opportunity to reassess whether their original investment in London could now be reduced and the available funds more profitably employed in the US.

This chapter analyzes the relations among bank mergers, changes in boards and their networks, and changes in the global footprint of merging banks. We examine all mergers involving U.S. banks with foreign branches between 1986 and 2004. We find that while the largest banks have become even larger through mergers, their boards have stayed roughly the same size with the same pattern of connections, leaving banks relatively less central in the intercorporate network. And while global banks previously had more globally oriented boards, this is no longer the case, as the link between board networks and strategy has become more tenuous. Because global banks were particularly prone to merging, the average commercial bank in the U.S. is now far more domestically oriented than firms in most other industries. American banks have thus become more domestic at the same time that the rest of American industry has grown much more global.

This chapter examines how foreign banks respond to domestic monetary policy in host countries during crisis periods, in particular, the response shown toward the Asian financial crisis of 1997–1999 and the global financial crisis of 2008–2009. By observing 283 domestic and foreign banks in seven emerging Asian economies, we find that foreign banks are slower than domestic banks in adjusting the growth of their loans to changes in host monetary policy. This inertia by foreign banks is found to be more pronounced in the recent 2008–2009 global crisis than in the 1997–1999 Asian regional crisis, suggesting that the buffering/hampering effects of foreign banks on the effectiveness of the domestic monetary policy transmission mechanism become stronger in a recent global crisis originating from outside Asia than a regional crisis imploded within Asia a decade earlier. We also find that foreign banks’ lower sensitivity than domestic banks to host monetary policy during the crisis periods is heterogeneous, depending on factors such as the extent of the adverse impact of crises on parent banks, the scope of business operation by parent banks, and foreign banks’ mode of entry into host banking markets.

This paper aims to examine tax leakages in secrecy financial centres.

This qualitative study relies on primary data from relevant statutes and secondary data from the public domain and in particular academic sources. The study makes concurrent use of the case study approach.

The study reinforces existing suggestions that tax evasion is significantly widespread from advanced to emerging economies. It also suggests serious enforcement difficulties because of light-touch surveillance among competing tax havens and financial professionals. Further, while relevant laws are in place to deal with illicit activities, enhanced transparency is needed to quell the problem and, in this instance, public access to beneficial owner data such as exemplified by UK’s public registry approach. The US Foreign Account Tax Compliance Act is proving to be effective, and similar expectations are raised for the equivalent the Organisation for Economic Co-Operation and Development initiative from 2017 onwards.

The paper is constrained with the general limitations associated with qualitative studies. These are, however, mitigated by triangulations of perspectives and so on.

The findings have implications for policymakers and the business community.

The findings could help to narrow inequality gaps between and within economies.

The paper combines insights from high-profile cases with those from academic sources. The analysis is also undertaken from the combined perspectives of law, economics and accounting. It also focuses in secrecy issues in both offshore and onshore financial centres.

Purpose – To discuss, from the perspective of developing countries, recent proposals for reforming international standards for bank capital requirements.

Methodology/approach – After evaluating, from the viewpoint of developing countries, the effectiveness of capital requirements reforms and progress in implementing existing regulatory accords, the chapter discusses the procyclical effects of Basel regimes, and suggests a reform proposal.

Findings – Minimum bank capital requirements proposals in developing countries should be complemented by the adoption of an incremental, size-based leverage ratio.

Originality/value of chapter – This chapter contributes to enlarge the academic and policy debate related to bank capital regulation, with a particular focus on the situation of developing countries.

Provides an overview of the directions, including wrong turnings, in which European and global banking is heading. Based on the viewpoint of Howard Davies, the head of the UK regulatory body the Financial Services Authority, covers issues such as greater regulation, Internet services and erosion of margins. Concludes that this is an exciting time to be in banking and those who succeed will have learnt to cope with today’s speed of change and technology development.

The purpose of this paper is to define and test a supplier selection model for Chinese and foreign banks in China.

In total, 12 reasons affecting customers' choice in selecting Chinese or foreign banks are developed and their respective importance are tested through 2,000 questionnaires which were distributed over the city‐zones of Hangzhou.

Supplier performance in terms of responsiveness is of particular importance in preferring foreign banks, which are seen to have an advantage in terms of professionalism, innovation and client‐orientation. For Chinese banks only one selection reason belongs to an inherent advantage, a large and convenient network, with the other reasons deriving from government's protection and historical conditions. Surprisingly, cultural aspects such as “guanxi” or personal relationship are only of minor importance.

Differentiates customers only by way of age and salary and focuses on the eastern urban population. Another shortcoming is the lack of extended qualitative research.

With the transition of the market for financial services in China customers will have increasing options to choose between Chinese and foreign banks. This paper offers valuable information regarding customer selection processes in China.

With most cross‐comparative research based on standard cultural dimensions, this study focuses on specific behaviour of Chinese customers in selecting services with Chinese or foreign banks, finding cross‐national differences to be less important than the characteristics of the specific market or product. This work also adds to the ongoing research agenda concerning Chinese customers' behaviour and Chinese banking.