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Int. J. Financial Stud. 2015, 3(3), 177-193; doi:10.3390/ijfs3030177

Net Interoffice Accounts of Global Banks: The Role of Domestic Funding

School of Business and Law, University of East London, Water Lane, London E15 4LZ, UK
Academic Editor: Nicholas Apergis
Received: 20 February 2015 / Revised: 26 May 2015 / Accepted: 12 June 2015 / Published: 26 June 2015
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Abstract

Existing literature has identified domestic restrictive monetary policy and deteriorating funding conditions as the predominant factors explaining the increase in net interoffice accounts of global banks, that is, the net liabilities of parent offices due to their related foreign offices. The purpose of this research is twofold. Firstly, it quantifies the responsiveness of net interoffice accounts to variations in different types of domestic funding. Secondly, the paper assesses whether the relationship between net interoffice accounts and domestic policy-steered rates depends on cross-sectional differences in the funding structure of global banks. Using US banks’ balance sheets data collected by the Federal Financial Institutions Examination Council, the results highlight the importance of domestic repo borrowings in explaining net interoffice accounts, especially for larger banks during the crisis. On the other hand, a negative relationship between policy rates and net interoffice accounts is observed only for those global banks with a relatively higher share of repo borrowings. View Full-Text
Keywords: US global banks; bank funding; monetary policy; repurchase agreements; panel data US global banks; bank funding; monetary policy; repurchase agreements; panel data
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

D'Avino, C. Net Interoffice Accounts of Global Banks: The Role of Domestic Funding. Int. J. Financial Stud. 2015, 3, 177-193.

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Int. J. Financial Stud. EISSN 2227-7072 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
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