Global Banks ’ Dynamics and the International Transmission of Shocks∗

15 % of the loans in the US are held by foreign banking institutions, headquartered in more than 50 countries. Using bank-level data, we present novel stylized facts describing character-istics of foreign institutions and compare them to the incumbent set of banks, distinguishing foreign banks by their mode of entry. We incorporate these facts into a structural model of entry in the banking sector where profit maximizing foreign banks decide whether and how to enter a foreign market. The model sheds light on the relationship between market access, capital flows, regulation, and entry, and has implications for the risk exposure that different organizationa