To the extent that they are interested in the stability of the host financial system, it is likely to relate to the possible impact on the parent bank’s operations in that system and the likely flow-on effects to the home financial system. A host supervisor therefore cannot rely on the home supervisor to act in the interests of the host financial system.
Similarly, host countries do not generally owe any formal duties to home countries or their supervisory authorities. The home and host countries can have very different views on the choice of techniques for responding to bank distress.