This is a question to which one would tend to give a different answer after the crisis than before, though maybe the centralisation of banking supervision and resolution in the euro area will change it again.
Looking at the experience of the Icelandic banks, whose export-orientation had got to the point where over 70 per cent of their net income was said to be generated from international  4  BIS central bankers’ speeches  business, but which then spectacularly blew up destroying a sizable segment of the Icelandic economy even though their foreign creditors were not bailed out by the Icelandic government, it would appear that the potential for future international expansion of banks headquartered in small countries may be doomed.