TY  - JOUR
AU  - Cetorelli,Nicola
AU  - Goldberg,Linda S.
TI  - Follow the Money: Quantifying Domestic Effects of Foreign Bank Shocks in the Great Recession
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17873
PY  - 2012
Y2  - February 2012
UR  - http://www.nber.org/papers/w17873
L1  - http://www.nber.org/papers/w17873.pdf
N1  - Author contact info:
Nicola Cetorelli
Federal Reserve Bank of New York
33 Liberty Street
New York, NY 10045
Tel: 212 720 5071
Fax: 212 720 8363
E-Mail: nicola.cetorelli@ny.frb.org

Linda S. Goldberg
Federal Reserve Bank-New York
33 Liberty Street
New York, NY 10045
Tel: 212/720-2836
Fax: 212/720-6831
E-Mail: linda.goldberg@ny.frb.org
AB  - Foreign banks pulled significant funding from their U.S. branches during the Great Recession. We estimate that the average-sized branch experienced a 12 percent net internal fund “withdrawal,” with the fund transfer disproportionately bigger for larger branches. This internal shock to the balance sheets of U.S. branches of foreign banks had sizable effects on their lending. On average, for each dollar of funds transferred internally to the parent, branches decreased lending supply by about 40 to 50 cents. However, the extent of the lending effects was very different across branches, depending on their pre-crisis modes of operation in the United States.
ER  -