as “too big to fail.” Subsidiaries of such banks may consequently be more willing to engage in riskier lending—resulting in higher loan-to-asset ratios—and hence may differ systematically from those that are not. We identify such subsidiaries by matching bank ownership information with the classification of global systemically important financial institutions (G-SIFIs) from the Basel Committee on Banking Supervision (Financial Stability Board 2011). This indicator variable is included as an additional covariate in column (B5).

As evident from Table 2, our results survive this array of robustness checks. For completeness, we also report in column (B6) the entire set of control variables considered in this subsection; again, the main result—that crisis experience conditions lending in a negative fashion—remains, and if anything the magnitude of the coefficient is slightly larger as a consequence of including these additional controls.

# **6.2 Alternative measures**

As additional tests, we consider replacing several key variables in the baseline with alternative measures. These are reported in Table 3, where each specification is run successively excluding, then including, home country-level covariates.

The first test pertains to replacing the key independent variable, that of crisis experience. As alluded to in Section 5, a country does not necessarily need to experience a financial crisis to attain expertise in the management of banking activities through a crisis (as was the case of Switzerland and Singapore). We introduce here an alternative measure of financial experience as developed by Abiad, Detragiache & Tressel (2010), which measures financial reforms in 91 economies over the 1973–2005 period. Although the period coverage is not identical with our baseline experience measure, this variable covers multiple aspects of financial sector policy, and is, in some ways, qualitatively richer in terms of the strength of experience measured. However, since this is not directly related to the occurrence of crises, the instruments employed for our IV in the baseline are not appropriate. We therefore report OLS estimates in columns (C1) and (C2).<sup>26</sup> The coefficient for this alternative measure of experience is statistically significant and, as is the case for our baseline crisis experience variable, negative.

One concern over our narrative of learning that we have conveyed thus far is the possibility that knowledge may be transmitted not so much within each banking institution, but rather between countries via some other indirect form of institutional transfer. Our second test, reported in columns (C3) and (C4), seeks to address this concern by including _both_ the main crisis experience variable as well as financial reforms measure. Since financial reforms are a more direct measure of the effect of learning via cross-country institutional transfer—for example, new macroprudential regulations promulgated in a crisis-struck home country may provide a demonstration effect for the host country—a finding where crisis experience is rendered insignificant by the inclusion of this

> 26If, instead, we were to include simultaneously _both_ our baseline crisis experience alongside this financial experience variable as regressors, there is no change in the significance and sign of our coefficients; we report this set of results in Table A.5 of the appendix. The bottom line is that both measures appear to capture somewhat distinct, but reinforcing, elements of experience; while positive, the correlation between the two variables is only 0.14.

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