The Janus face of bank geographic complexity

Complexity and riskiness of banking organizations: Evidence from the International Banking Research Network

“…Using a sample of large banking organizations from around the world and complexity based on banking affiliates only, geographic complexity was found to dampen the effects of local economic shocks (Aldasoro , Hardy and Jager 2021). The positive effect of local prudential regulations and of global regulatory initiatives such as the G-SIB framework is weakened as well.…”

“…Complementary work by the BIS adds cross-country evidence on the network and concentration of international branches and subsidiaries of 96 large banks from around the world for 2008 to 2016, including 29 of the 30 GSIBs (Aldasoro, Hardy, and Jager 2021). Over time, global banking organizations as they have become more distinct in their international footprints.…”

“…Various studies point to better risk frontier outcomes when banking organizations are ex ante better capitalized or better governed. In a cross-country setting, the geographic complexity of foreign banking affiliates of the largest international banks tended to mitigate the effects of local shocks on bank risk (z-score) while weakening the positive effects of prudential regulation on capitalization (Aldasoro, Hardy and Jager 2021).…”

Mapping exposures of EU banks to the global shadow banking system

“…Our paper complements this growing literature on banks' complexity (e.g., Cetorelli and Goldberg 2014Goldberg , 2016Krause, Sondershaus and Tonzer 2017;Aldasoro, Hardy and Jager 2020;Flood et al 2020;Buch and Goldberg, 2021;Correa and Goldberg, 2021) by detailing the asset exposures of EU banks to the global shadow banking system using a unique dataset collected by the EBA in 2015. While some of these aforementioned studies on bank complexity capture the structure of banking organisations, including affiliate composition, our paper focuses instead on the asset exposures of EU banks to the global shadow banking system drawing on this novel dataset.…”

The Relationship Between Geographic Concentration in Banking Credits and Credit Risk

“…For example, Meslier et al (2016) claim that small banks and very bigger banks can be benefited from the geographic concentration. Furthermore, some studies claim that there is a trade off between low risk and high returns (Türkmen andYiğit, 2012;Nyola et al, 2021;Argimón and Rodríguez-Moreno, 2021 ).For instance, in other study, Aldasoro et al (2022) describe condition as "The Janus face of bank geographic complexity". It can be comment that there is not one clear explanation.…”