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AbstractThe paper analyzes the effects of changes to regulatory policy and to monetary policy on crossborder bank lending since the global financial crisis. Cross-border bank lending has decreased, and the home bias in the credit portfolio of banks has risen sharply, especially among banks in the euro area. Our results suggest that expansionary monetary policy in the source countries -as measured by the change in reserves held at central banks -has encouraged cross-border lending, both in euro area and non-euro area countries. Regarding regulatory policy, increases in financial supervisory power or independence of the supervisory authorities have encouraged credit outflows from source countries. The findings thus underline the importance of regulatory arbitrage as a driver of crossborder bank flows since the global financial crisis. However, in the euro area, arbitrage in capital stringency was linked to lower cross-border lending since the crisis. We study the determinants of the structural changes in cross-border banking in the aftermath of the GFC. In particular, we are interested in the importance of specific push and pull factors that have been recently discussed, namely adjustments in banking regulation and the role of monetary policy in advanced countries.In a second step, we ask how the home bias in the credit portfolio of banking systems has been affected by changes in regulatory and monetary policy since the crisis. The analysis of the home bias is a complementary analysis as it takes a different perspective on the same question of the drivers of cross-border banking. Using the bilateral home bias between country pairs as the dependent variable allows us to take the portfolio decision of banks more directly into account. That is, it allows us to 2 investigate how changes to regulatory policy and monetary policy have influenced the decision of banks to invest in a particular country compared to the home country and third countries.As discussed in previous studies, differences in banking regulation may be important push or pull factors for cross-border bank claims (e.g. Houston, Lin and Ma, 2012), and hence for credit home bias. If regulatory conditions differ across countries, banks may be attracted by regions offering a less restrictive regulatory environment. A factor that could reduce cross-border lending are stricter regulatory requirements that make foreign lending more expensive. Using information o...