U.S. based multinational banks' foreign operations and total bank risk

This paper examines the relationship between the foreign operations of U.S. based multinational banks and their overall bank risk. Using data from the call reports for the fourth quarters of 2006 and 2009, the paper analyzes whether U.S. based banks experienced a change in overall bank risk from foreign investment/operations during the financial crisis. Evidence suggests mixed results concerning the relationship between foreign operations and bank risk of U.S. based multinational banks both before and during the financial crisis. However, during the financial crisis, there is more definitive evidence suggesting a negative relationship between the foreign operations of U.S. based multinational banks and total bank risk.