This paper analyzes the lending behavior of foreign-owned banks during the recent global crisis. Using bank-level panel data for 51 countries, the paper explores the role of affiliate and parent financial characteristics, host location, as well as the impact of parent geographic origin and reach on foreign banks' credit growth. Overall, the analysis finds robust evidence that foreign banks curtailed the growth of credit relative to other banks, independent of the host region in which they operate. Banks from the United States reduced loan growth less than other parent banks. Neither the global nor regional reach of parent banks influenced the lending growth of foreign affiliates. Parent capitalization and not parent funding explained the behavior of foreign bank credit growth during the global crisis. However, funding did affect the lending behavior of domestic and foreign banks in host countries, with those relying more heavily on deposits suffering a smaller decline in bank lending. Although not the focus of the paper, we also find that government-owned banks played a countercyclical role in all regions.

This work provides new evidence of Asia-Pacific stock market integration by incorporating the regime changes of each stock market through the smooth transition autoregressive (STAR) model. According to empirical results, most Asia-Pacific stock market returns follow STAR dynamics to a significant degree with more rapid and frequent regime changes of a shorter nature compared with G7 markets. A series of STAR-based Granger causality tests reveal evidence of stronger equity market integration compared with linear Granger causality tests. We also find that Asia-Pacific stock markets are integrated in different levels. Finally, we provide evidence that in the early twenty-first century the influence of China and the United States on Asia-Pacific stock markets has been maintained while that of Japan has been weakened. cointegrated in the long term and bilaterally Granger caused. Further evidence of Asian stock market integration is revealed in a study by Valadkhani and Chancharat (2008). They also find significant cointegration and Granger causation among Asian stock market indexes over the period from 1987 to 2005 and argue that this empirical evidence supports the leading role of some stock markets in Asia. Burdekin and Siklos (2012) show that the enormous growth of the Shanghai market in the new millennium has been accompanied by a meaningful level of integration with other regional and world markets despite ongoing capital controls.Along with simple linear estimation and its Granger causality test, another empirical framework employed in a price-(or return-) based approach is the synchronization of financial market cycle, which assesses the integration of markets by measuring whether different markets are in the same phase of a cycle (see Candelon et al. 2008;Edwards et al. 2003;Pagan and Sossounov 2003;Yu et al. 2010). Edwards et al. (2003) construct a stock market cycle formula using five characteristics of its phases, such as duration, amplitude, and volatility. They find that Asian stock market cycles have become more dissimilar to those of stock markets in developed countries and tend to have shorter regime duration and larger amplitude and volatility than do the markets of developed countries. Candelon et al. (2008) implement Bry and Boschan's (1971) dating algorithm over a six-month time interval by employing the generalized method of moments (GMM) approach to measure Asian markets' synchronization, and hypothesize a rise in Asian stock market synchronization after the Asian crisis of 1997. Yu et al. (2010) also identify the peaks and troughs of stock markets by comparing the stock returns between the same eight-month time windows and find that the integration process in Asian equity markets has picked up again since late 2007 although this process is not complete. However, these empirical frameworks include boom and bust periods of stock markets determined by uniformly defined characteristics between stock markets rather than being determined by the distinct characteristics of individual markets.In the lit...

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