BIS central bankers’ speeches  3  significant portion of the dollars raised by European banks in the pre-crisis period ultimately returned to the United States in the form of investments in U.S. securities.
Indeed, the amount of U.S. dollar-denominated asset-backed securities and other securities held by Europeans increased significantly between 2003 and 2007, much of it financed by the short-term, dollar-denominated liabilities of European banks.13 Meanwhile, commercial and industrial lending originated by U.S. branches and agencies as a share of their third-party liabilities fell significantly after 2003.14 In contrast, U.S. broker-dealer assets of the top-10 foreign banks increased rapidly during the past 15 years, rising from 13 percent of all foreign bank third-party assets in 1995 to 50 percent in 2011.15 Lessons from the recent financial crisis The 2007–2008 financial crisis and the continuing financial stress in Europe have revealed financial stability risks associated with the foreign banking model as it has evolved in the United States.