<p>Using a sample of 639 cross-border bank acquisitions in 65 countries from 1995 to 2019, we examine the spillover effects of such acquisitions on the systemic risk of non-target (peer) banks in host countries. We find that cross-border bank acquisitions lead to increases in peer banks’ systemic risk. We evaluate competing hypotheses related to moderating institutional factors and to the underlying channels at work. Our findings show that CB bank acquisitions lower peer banks’ market and pricing power, which leads them to shift towards more volatile non-interest income activities. The shift towards such fee-based activities, which tend to be more cyclical and require less capital, leads to a buildup in systemic risk. We find little evidence of a credit risk or funding-shock channel at work. The adverse spillover effects are mitigated in host countries where peer banks are likely to enjoy informational advantages over foreign entrants due to their higher liability of foreignness. Specifically, the spillover effects are mitigated for peer banks in host countries with a culture that is less open and trusting of foreigners, and in countries with stronger bank supervision. Our findings contribute to the ongoing debate about the benefits and costs of bank globalization.</p>