Abstract
This paper examines the Leverage Ratio and Total Capital Ratio of global versus non-global banks, in both the pre- and the post crisis period. A panel data set of 165 global and non-global financial institutions from 38 countries is used for the period 1999-2015 and a random effects model is employed to examine whether global banks perform better or not compared to their non-global counterparts. This study comes up with two important findings. First, global banks do not exhibit heterogeneous behavior with respect to both ratios neither in the pre- and especially nor in the post-crisis period. Second, the Leverage Ratio is crisis-insensitive, but the Total Capital Ratio is not. Our findings encourage further research on the topic of the contribution of global banks to the financial crisis propagation (at least as far as leverage is concerned).
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