Abstract: This study introduces Asian evidence on implications of foreign bank lending for financial shock transmission. The region’s most recent experience of the Global Financial Crisis reveals that transmission through balance sheet adjustments and interbank markets is significant for global foreign banks but not for Asian regional foreign banks. Global foreign banks identified as bearing subprime-related losses lead to 50 per cent reduction in lending growth by their Asian subsidiaries. A higher level of money market dependence as evident for global foreign banks is also a major factor in a subsidiary’s loan contraction in crisis. The study highlights the role of diversity of foreign bank ownership in stabilizing credit supply in times of stress.