Over the past decades, international trade has expanded, production has become global, and value added chains have spanned across a larger number of countries (Baldwin 2016). Longer and more complex global value added chains can have implications for the volatility of production.
What is therefore needed is a better understanding of how risk-sharing and the integration of global banking markets interacts with the globalization of non-financial firms. Different structural features of banking systems prior to the crisis had an impact on how banks adjusted to the new environment. Banking systems differ with regard to their degree of competition domestically and their exposure to international markets.