We investigate how the lending activities of a multinational bank s affiliates located abroad are affected by funding difficulties in view of the financial crisis. For this, we consider transaction-induced changes in long-term lending to the private sector of 40 countries by the affiliates of...

We show that an expansive foreign monetary policy, where global banks are headquartered, increases the borrowing activity of their subsidiaries in local money markets in the countries of residence. We use a unique dataset of the Mexican money market. We report evidence that a limited flexibility...