Multinational Banks and the Ripple Effects of Global Economic Crises

Abstract

Multinational banks play a significant role in the global economy, and they are often at the forefront of global economic crises. This chapter examines the ripple effects of global economic crises on multinational banks, using case studies of several major banks during the 2008 financial crisis and the COVID-19 pandemic. The chapter finds that multinational banks are particularly vulnerable to global economic crises because of their complex operations and global reach. When a crisis hits, it can quickly spread to different countries and regions, and multinational banks can find themselves exposed to losses in multiple markets. The chapter also finds that multinational banks play a role in transmitting global economic crises. For example, when a crisis hits, multinational banks may tighten lending standards and reduce their exposure to certain markets. The chapter concludes by discussing the implications of these findings for regulators and policymakers.