Global liquidity: a new phase?

Bryan Hardy and Goetz von Peter ()

BIS Quarterly Review, 2023

Abstract: Foreign currency credit – a key aspect of global liquidity – has undergone distinct phases. The first phase recorded by the BIS global liquidity indicators (2003–09) featured soaring bank credit amid accommodative financial conditions in the run-up to the Great Financial Crisis (GFC). The second phase (2009–21) saw a shift towards bond markets and more dollar credit, especially to borrowers in emerging market economies (EMEs), on the back of tighter bank regulation and a loose monetary stance. Has the recent global surge in inflation and monetary tightening ushered in a new phase? Recent patterns point to a contraction in foreign currency credit, primarily in dollars, and particularly for EMEs.

JEL-codes: E43 F34 G15 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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