Foreign Banks: Trends, Impact and Financial Stability

This paper introduces a comprehensive database on bank ownership for 137 countries over 1995-2009, and reviews foreign bank behavior and impact. It documents substantial increases in foreign bank presence, with many more home and host countries. The paper states, that only in developing countries, is foreign bank presence negatively related with domestic credit creation and that during the global crisis foreign banks reduced credit more compared to domestic banks, except when they dominated the host banking systems.