Banks are overseen by a home regulator in their country of incorporation, and by a series of host regulators where they operate.

The hiccups in Western banks have served to disrupt the availability of trade credits, and, if amplified, could destabilize local banks.

But they also wanted banks to direct more resources to financing domestic investments and industry.

Apart from discouraging banks from investing abroad, outright restrictions on foreign banks market access cannot be ruled out, either.

In the early twentieth century, a congressional district s rich landowners were likely to own the local banks as well, or to be related to, or friends with, bank owners.

All other local banks have adopted the same approach, severely restricting access to financial services for households and entrepreneurs.

And a stronger economy would help domestic banks by reducing potential bad debt and mortgage defaults.

But the impact has been limited, owing to the authorities ability to stuff debt down the throats of captive local banks, insurance companies, and pension funds.

But, as local government debt grows, Chinese banks have begun to regard real estate and local financing platforms as a major credit risk.

This supply chain is characterized by the dominance of the state owned banks, high domestic savings, relatively under developed financial markets, and a closed capital account.

Local governments are saddled with a mountain of debt and wasted investments, banks accumulate risky loans, and farmers lose their land.

After the elections, the Palestinian stock market fell about 20 percent, and the Palestinian Authority exhausted its borrowing capacity with local banks.

Home regulators and lenders of last resort are increasingly worried about their potential exposure to losses in banks overseas operations.

If anything, domestic banks with shallower pockets were more likely to cut back in the crisis.

In Italy, the difficulties arise from banks continued lending to domestic companies, especially small and medium size enterprises (SMEs), while GDP has stagnated.

The state, which is seeking to rescue the domestic automobile industry, allocated to the firm more credits through state owned banks.

For example, in India, there is a great need for financing large infrastructure projects a need that cannot easily be met by local banks.

And the China Banking Regulatory Commission has called on banks to retain last year s LGIV loan quotas for 2013, and to ensure that the overall balance of loans to LGIVs does not exceed the 2011 year end total.

Ernest Patrikis, a former Fed supervisor, points to the clear implication that in the US domestic banks will have a strong advantage over foreign banks.

The fires of the US sub prime mortgage crisis were stoked not just by domestic regulatory failures, but also by a global saving glut, which sent banks on a wild goose chase for yield.

It would be understandable if emerging markets, having seen deep problems in the conduct of foreign banks, now insist on domestic ownership and control of financial institutions.

How to Bail out Good Banks and Let Bad Banks Fail

There may be a legal rationale for this neo imperial elitism. The so called C 6 might argue that, given their price stability mandate, only central banks of countries whose economic fate might destabilize domestic prices should receive privileged access to domestic currency.

And China s big banks have lent large sums, willingly or otherwise, to local governments for infrastructure projects many of them of dubious economic value.

When banks stopped providing short term liquidity to other banks and industrial companies, central banks filled the gap.

Many local Spanish banks can thus stay afloat only because they refinance a large share of their mortgage book via the European Central Bank.

This should not be surprising, since many factors besides international debt flows can cause domestic banks to throw caution to the wind and start lending recklessly.

Part of Hariri s legacy was the award of quasi monopolistic licences to cronies for mobile telephones, for example and the sale of government debt at highly profitable rates to local banks in which had a direct interest.

At the same time, many very small businesses cannot get credit, because the local banks on which they depend have inadequate capital, owing to accrued losses on commercial real estate loans.

Local LWV organizations monitor their local government meetings and address local issues.

The inter bank market dries up, as banks lose trust in one another.

Banks in the eurozone came under pressure, and interbank tensions increased.

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The Big Bank Fix

Measuring the Costs of Too Big To Fail

To avoid such an internal sovereign debt crisis, China s Budget Law, adopted in 1994, forbade local governments from borrowing autonomously, either by issuing bonds to the public or by getting credits from banks.

In the wake of the global financial crisis, local governments borrowed heavily from banks to support China s massive stimulus program, amassing 10.7 trillion ( 1.7 trillion) worth of debt by 2011.

In the end, both have to be bailed out by central banks.

The implicit subsidy to banks means that German banks have an advantage over those of other countries.

Local govt. Nkwerre local government of Imo State

I read news and I also heard from relatives and people who work in Egyptian banks that Egyptian clients are withdrawing their money from the foreign banks especially Citibank.

The Wrong War for Central Banking