A global lending channel unplugged? Does U.S. monetary policy affect cross-border and affiliate lending by global U.S. banks?

Judit Temesvary, Steven Ongena and Ann Owen

Journal of International Economics, 2018, vol. 112, issue C, 50-69

Abstract: We examine how U.S. monetary policy affects the international activities of U.S. banks. We access a rarely studied U.S. bank-level regulatory dataset to assess at a quarterly frequency how changes in the U.S. Federal funds rate (before the crisis) and quantitative easing (after the onset of the crisis) affect changes in cross-border claims by U.S. banks across countries, maturities and sectors, and also affect changes in claims by their foreign affiliates. We find robust evidence consistent with the existence of a potent global bank lending channel. In response to changes in U.S. monetary conditions, U.S. banks strongly adjust their cross-border claims in both the pre- and post-crisis period. However, we also find that U.S. bank affiliate claims respond mainly to host country monetary conditions.

Keywords: Bank lending channel; Monetary transmission; Global banking; Cross-country analysis (search for similar items in EconPapers)
JEL-codes: E44 E52 F42 G15 G21 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (68)

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Related works:
Working Paper: A Global Lending Channel Unplugged? Does U.S. Monetary Policy Affect Cross-border and Affiliate Lending by Global U.S. Banks? (2018)
Working Paper: A Global Lending Channel Unplugged? Does U.S. Monetary Policy Affect Cross-border and Affiliate Lending by Global U.S. Banks? (2015)
Working Paper: A global lending channel unplugged? Does U.S. monetary policy affect cross-border and affiliate lending by global U.S. banks? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:112:y:2018:i:c:p:50-69

DOI: 10.1016/j.jinteco.2018.02.004

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