Working Paper Series no. 448: Net interoffice accounts of global banks: the role of domestic funding

Abstract

Using US banks' balance sheet data, this paper examines the responsiveness of net interoffice accounts, that is, the net liabilities of parent offices due to their foreign-related offices, to variations in different types of domestic funding. Furthermore, it investigates whether the relationship between net interoffice accounts and domestic policy-steered rates depends on cross-sectional differences in the funding structure of global banks. Estimation results suggest that domestic interbank and repo borrowings are important drivers of net interoffice accounts, the latter being significant during the crisis period. A negative relationship between policy rates and net interoffice accounts is observed only for those global banks with a relatively higher share of repo borrowings.

Carmela D’Avino
September 2013

Classification JEL : G21, F34, E58

Keywords : US global banks, net interoffice accounts, funding