Nonbank lenders as global shock absorbers: Evidence from US monetary policy spillovers

David Elliott, Ralf R. Meisenzahl and Jose-Luis Peydro

Journal of International Economics, 2024, vol. 149, issue C

Abstract: We show that nonbank lenders act as global shock absorbers from US monetary policy spillovers. For identification, we exploit monetary policy surprises and the global syndicated lending market, where detailed loan-level data allow us to compare the participation of banks and nonbanks in the same loan. When US policy tightens, dollar credit to non-US firms falls, but nonbanks increase credit supply (relative to banks), thereby mitigating the total credit reduction. This relative increase is stronger for riskier non-US firms, proxied by emerging market firms, high-yield firms, or firms in countries with stronger capital inflow restrictions. Finally, there are real effects associated with the international nonbank channel of monetary policy, as firms with better access to nonbank credit relatively increase total corporate debt, investment, and employment.

Keywords: Nonbank lending; International monetary policy spillovers; Global financial cycle; Banks; US dollar funding for non-US firms (search for similar items in EconPapers)
JEL-codes: E5 F34 F42 G21 G23 G28 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Chapter: Nonbank Lenders as Global Shock Absorbers: Evidence from US Monetary Policy Spillovers (2023)
Working Paper: Nonbank lenders as global shock absorbers: evidence from US monetary policy spillovers (2023)
Working Paper: Nonbank Lenders as Global Shock Absorbers: Evidence from US Monetary Policy Spillovers (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:149:y:2024:i:c:s0022199624000321

DOI: 10.1016/j.jinteco.2024.103908

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