This paper identifies two theoretical mechanisms that relate the regulatory arbitrage behavior of internationally active banks (IABs) to global financial conditions. According to the first mechanism, regulation becomes more binding during adverse financial conditions. Under these conditions,...

We find that the lending behaviour of global banks' subsidiaries throughout the world is more closely related to local macroeconomic conditions and their financial conditions than to those of their owner-specific counterparts. This inference is drawn from a panel dataset populated with...

This paper infers the degree of economic integration amongst G-7 countries by estimating a two country DSGE model separately for each country in the group. In doing so, the two economies in the model are represented by the observations for a specific country and the corresponding values for the...