International Bank Lending Channel Of Monetary Policy PDF Download
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Author | : Silvia Albrizio |
Publisher | : International Monetary Fund |
Total Pages | : 61 |
Release | : 2019-11-01 |
Genre | : Business & Economics |
ISBN | : 1513519638 |
Download International Bank Lending Channel of Monetary Policy Book in PDF, ePub and Kindle
How does domestic monetary policy in systemic countries spillover to the rest of the world? This paper examines the transmission channel of domestic monetary policy in the cross-border context. We use exogenous shocks to monetary policy in systemically important economies, including the U.S., and local projections to estimate the dynamic effect of monetary policy shocks on bilateral cross-border bank lending. We find robust evidence that an increase in funding costs following an exogenous monetary tightening leads to a statistically and economically significant decline in cross-border bank lending. The effect is weakened during periods of high uncertainty. In contrast, the effect is found to not vary according to the degree of borrower country riskiness, further weakening support for the international portfolio rebalancing channel.
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Total Pages | : |
Release | : 2015 |
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Download The International Bank Lending Channel of Monetary Policy Rates and QE Book in PDF, ePub and Kindle
Author | : Bernardo Morais |
Publisher | : |
Total Pages | : 47 |
Release | : 2015 |
Genre | : Banks and banking, Foreign |
ISBN | : |
Download The International Bank Lending Channel of Monetary Policy Rates and Quantitative Easing Book in PDF, ePub and Kindle
This paper identifies the international credit channel of monetary policy by analyzing the universe of corporate loans in Mexico, matched with firm and bank balance-sheet data, and by exploiting foreign monetary policy shocks, given the large presence of European and U.S. banks in Mexico. The paper finds that a softening of foreign monetary policy increases the supply of credit of foreign banks to Mexican firms. Each regional policy shock affects supply via their respective banks (for example, U.K. monetary policy affects credit supply in Mexico via U.K. banks), in turn implying strong real effects, with substantially larger elasticities from monetary rates than quantitative easing. Moreover, low foreign monetary policy rates and expansive quantitative easing increase disproportionally more the supply of credit to borrowers with higher ex ante loan rates -- reach-for-yield -- and with substantially higher ex post loan defaults, thus suggesting an international risk-taking channel of monetary policy. All in all, the results suggest that foreign quantitative easing increases risk-taking in emerging markets more than it improves the real outcomes of firms.
Author | : Mr.Giovanni Dell'Ariccia |
Publisher | : International Monetary Fund |
Total Pages | : 41 |
Release | : 2013-06-06 |
Genre | : Business & Economics |
ISBN | : 1484381130 |
Download Bank Leverage and Monetary Policy's Risk-Taking Channel Book in PDF, ePub and Kindle
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Author | : Ms.Petya Koeva Brooks |
Publisher | : International Monetary Fund |
Total Pages | : 13 |
Release | : 2007-12-01 |
Genre | : Business & Economics |
ISBN | : 1451868359 |
Download Does the Bank Lending Channel of Monetary Transmission Work in Turkey? Book in PDF, ePub and Kindle
Does the bank lending channel of monetary transmission work in Turkey? Using the May- June 2006 financial turbulence as an exogenous shock that prompted a significant tightening of monetary policy, this paper examines the loan supply response of Turkey's banks, depending on their balance sheet characteristics. The empirical results indicate that banks can play a role in Turkey's monetary transmission mechanism. Specifically, bank liquidity is found to have a significant effect on loan supply in Turkey. This suggests that the effect of monetary policy in Turkey can be propagated by the banking sector, depending on its liquidity position.
Author | : Nicola Cetorelli |
Publisher | : DIANE Publishing |
Total Pages | : 41 |
Release | : 2010-11 |
Genre | : Business & Economics |
ISBN | : 1437933874 |
Download Global Banks and International Shock Transmission Book in PDF, ePub and Kindle
Global banks played a significant role in transmitting the 2007-09 financial crisis to emerging-market (EM) economies. The authors examine adverse liquidity shocks on main developed-country banking systems and their relationships to EM across Europe, Asia, and Latin Amer., isolating loan supply from loan demand effects. Loan supply in EM across Europe, Asia, and Latin Amer. was affected significantly through three separate channels: (1) a contraction in direct, cross-border lending by foreign banks; (2) a contraction in local lending by foreign banks¿ affiliates in EM; and (3) a contraction in loan supply by domestic banks, resulting from the funding shock to their balance sheets induced by the decline in interbank, cross-border lending. Charts and tables.
Author | : Nasha Ananchotikul |
Publisher | : International Monetary Fund |
Total Pages | : 34 |
Release | : 2015-09-28 |
Genre | : Business & Economics |
ISBN | : 1513506005 |
Download Monetary Policy Transmission in Emerging Asia Book in PDF, ePub and Kindle
Given the heavy reliance on bank lending as the main source of financing in most Asian economies, banks could potentially play a pivotal role in monetary policy transmission. However, we find that Asia’s bank lending channel or, more broadly, credit channel of domestic monetary policy is not very strong at the aggregate level. Using bank-level data for nine Asian economies during 2000–2013, we show that heterogeneity of bank characteristics (e.g., ownership type, financial position), degree of foreign bank penetration of the domestic banking sector, and global financial conditions all have a bearing on the response of domestic credit to changes in domestic monetary policy, and may account for the apparently weak credit channel at aggregate level.
Author | : Claudia M. Buch |
Publisher | : |
Total Pages | : 0 |
Release | : 2018 |
Genre | : |
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Download The International Transmission of Monetary Policy Book in PDF, ePub and Kindle
This paper presents the novel results from an internationally coordinated project by the International Banking Research Network (IBRN) on the cross-border transmission of conventional and unconventional monetary policy through banks. Teams from seventeen countries use confidential micro-banking data for the years 2000 through 2015 to explore the international transmission of monetary policies of the U.S., euro area, Japan, and United Kingdom. Two other studies use international data with different degrees of granularity. International spillovers into lending to the private sector do occur, especially for U.S. policies, and bank-specific heterogeneity influences the magnitudes of transmission. The effects are supportive of the international bank lending channel and the portfolio channel of monetary policy transmission. They also show that the frictions that banks face matter; in particular, foreign currency funding and hedging considerations can be a key source of heterogeneity. The forms of bank balance sheet heterogeneity that differentiate spillovers across banks are not uniform across countries. International spillovers into lending can be large for some banks, even while the average international spillovers of policies into nonbank lending generally are not large.
Author | : Michael S. Gibson |
Publisher | : |
Total Pages | : 56 |
Release | : 1997 |
Genre | : Bank loans |
ISBN | : |
Download The Bank Lending Channel of Monetary Policy Transmission Book in PDF, ePub and Kindle
Author | : Mr.John C Bluedorn |
Publisher | : International Monetary Fund |
Total Pages | : 39 |
Release | : 2013-05-22 |
Genre | : Business & Economics |
ISBN | : 1484323378 |
Download Heterogeneous Bank Lending Responses to Monetary Policy Book in PDF, ePub and Kindle
We present new evidence on how heterogeneity in banks interacts with monetary policy changes to impact bank lending. Using an exogenous policy measure identified from narratives on FOMC intentions and real-time economic forecasts, we find much greater heterogeneity in U.S. bank lending responses than that found in previous research based on realized federal funds rate changes. Our findings suggest that studies using realized monetary policy changes confound the monetary policy’s effects with those of changes in expected macrofundamentals. We also extend Romer and Romer (2004)’s identification scheme, and expand the time and balance sheet coverage of the U.S. banking sample.