The puzzle of credibility in international markets -- A theory of credibility through financial integration -- Foreign bank advantage in comparative perspective -- Currency boards and foreign bank presence -- Inflation targeting and foreign bank presence -- Reputation in crisis -- Conclusion

Global liquidity flows are largely channeled through banks and nonbank financial institutions. The common drivers of global liquidity flows include monetary policy in advanced economies and risk conditions. At the same time, the sensitivities of liquidity flows to changes in these drivers differ...