Discussion Paper

Ring-Fencing and “Financial Protectionism” in International Banking

Abstract: Some market watchers and academic researchers are concerned about a “Balkanization” of banking, owing to a sharp decline in cross-border international banking activity (see chart below), and an increased home bias of financial transactions. Meanwhile, policy and regulatory efforts are under consideration that may further induce banks to shift away from international activity, including ring-fencing of domestic banking operations, other forms of “financial protectionism,” and enhanced oversight and prudential measures.

Keywords: liquidity; international; bank; ring fence;

JEL Classification: G15;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2013-01-09

Number: 20130109