Green bank regulation and global bank complexity: An international study

This study investigates the relationship between green bank regulation and global bank geographic complexity using data from 121 countries spanning the period 1996 to 2021. By examining the affiliate networks of internationally active banking organizations, we construct a comprehensive measure of bank geographic complexity for each country. Green bank regulation is defined based on whether central banks have an explicit sustainability mandate (Dejure) or actively support government policies aimed at achieving sustainability goals (Defacto). The findings reveal that green bank regulation has a positive and significant impact on bank geographic complexity, with stronger effects observed in Low Income and Lower Middle Income Countries (LI & LMC) and Upper Middle Income Countries (UMC). Extensive robustness checks confirm the stability of these results across alternative measures. The study underscores the importance of targeted green regulatory frameworks and highlights their role in fostering a more diverse and globally integrated banking sector. These findings offer valuable policy and managerial