This paper studies how global banks transmit liquidity shocks via their internal capital markets. The unexpected access … as our liquidity shock. Using microdata on all affiliates abroad, we test whether affiliates located outside the US … actively managed internal capital markets and the increased centralization of global banks' liquidity management at the …

multinational banks' intimacy with local markets. The benefit is that it allows multinational banks to create more liquidity. The … cost is that it causes inefficiencies in internal capital markets, on which a bank relies to allocate liquidity across …