Concentration in Asia’s Cross-Border Banking: Determinants and Impacts

Cross-border bank positions in Asia and the Pacific remain highly concentrated to a few counterparties, exposing the region to financial risks and policy spillovers. This study constructs and analyzes cross-border bank concentration measures for the 47 economies. Results suggest that higher capital account, trade openness, and per capita income are significantly associated with lower cross-border bank concentration. Moreover, elevated cross-border bank concentration tends to lower domestic credit growth and nonperforming loans. The paper discusses policy implications for Asia and the Pacific.