Assistant Professor of Economics Judit Temesvary published an article in the Journal of International Money and Finance. “Foreign activities of U.S. banks since 1997: The roles of regulations and market conditions in crises and normal times” focuses on ways bank, market and regulatory conditions in both the United States and host countries influence U.S. banks’ choices of which foreign markets to enter and how much claims and liabilities to take on there.
Temesvary analyzed data on the foreign activities of U.S. banks in 107 worldwide host markets from 1997 to 2013. She found that in addition to a bank’s previous experience with foreign markets, a key factor in the decision of a bank to enter (or exit) a foreign market is the overall strength of that bank’s balance sheet. She also found that “banks choose their foreign activities during banking and market crises differently than they do in ‘normal’ times.”