This paper lays out the key considerations underlying the choice between branch and subsidiary structure for cross-border banking groups and their home and host countries. It examines the relative advantages of different organizational structures for cross-border banking groups and discusses the issues for financial stability from home and host country perspectives. Section II provides a brief overview of the economic distinction between centralized and decentralized structures; it discusses the factors influencing a group’s choice of branch versus subsidiary as well as the implications for home/host financial stability. Section III then provides the policy implications to assess whether the choice could.
