Financial Globalization and Cross-Border Comovements of Money and Population: Foreign Bank Offices in Los Angeles

Abstract

Studies of migration and financial globalization focus on either the movement of money, with people staying put, or on the movement of people, with little attention to the impact of the money that moves with them. This paper uses in-depth interviews with executives at ethnic-Chinese foreign-bank offices in Los Angeles to consider the comovement of people and money. We find that understanding the causes and consequences of this comovement requires adding both ethnic and macrostructural layers to discussions of financial globalization. The forces that have led to the rise of a Chinese-American banking sector and to the opening of twenty-one Chinese foreign-bank offices in Los Angeles are intertwined: immigration from the Chinese diaspora to the USA, the growth trajectory and financial transformation of East Asia, and the financial and economic evolution of Los Angeles. Ethnic-Chinese foreign-bank offices in Los Angeles have dual roles: they function both as global outposts managing their headquarters' cross-border financial flows, and as localized institutions that are gradually becoming incorporated into Southern California's internal banking and financial markets. Foreign and domestic ethnic-Chinese banks play complementary roles in facilitating ethnic-Chinese economic development in Southern California. Framing these cross-border money–population flows and this cross-border institution building, respectively, are macrostructural constraints rooted in aggregate net financial flows and the changing strategies of global megabanks.

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