FLARblog | What Drives Banks’ Responses to Global Monetary Shocks: Ownership or Balance Sheets?
June 24, 2026
When the U.S. Federal Reserve changes interest rates, which banks transmit those shocks more strongly to the rest of the world? Conventional wisdom suggests foreign-owned banks should be more sensitive because they belong to multinational banking groups. Our evidence, based on more than 2,000 banks across 116 countries, suggests a different conclusion: ownership alone is not a reliable predictor of how international monetary shocks affect bank lending.
