Their cash-to-third-party liability ratio from the mid-1980s through the late 1990s generally ranged between 25 percent and 30 percent. The U.S. branches and agencies of foreign banks that borrowed from their parents and lent those funds in the United States (“lending branches”) held roughly 60 percent of all foreign bank branch and agency assets in the United States during the 1980s and ’90s.
Commercial and industrial lending continued to account for a large part of foreign bank branch and agency balance sheets through the 1990s.11 This profile of foreign bank operations in the United States changed in the run-up to the financial crisis. Reliance on less stable, short-term wholesale funding increased significantly.