Economics at your fingertips  

The currency dimension of the bank lending channel in international monetary transmission

Elod Takats and Judit Temesvary ()

Journal of International Economics, 2020, vol. 125, issue C

Abstract: We investigate how the use of a currency transmits monetary policy changes in the global banking system. We use a newly available rarely accessed dataset on the bilateral cross-border lending flows of 27 BIS-reporting lending banking systems to borrowers in 51 countries, broken down by currency denomination (USD, EUR and JPY). We have three main findings. First, we identify a currency dimension of the international bank lending channel: monetary changes in a currency significantly affect cross-border lending flows in that currency, even when neither the lending banking system nor the target country uses that currency as their own. Second, this transmission works mainly through lending to non-banks. Third, the currency dimension of the bank lending channel works similarly across the three currencies, suggesting that the USD may not be unique in this respect.

Keywords: Cross-border bank lending; Bank lending channel; Monetary transmission; Currency denomination (search for similar items in EconPapers)
JEL-codes: E5 F42 G21 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Currency Dimension of the Bank Lending Channel in International Monetary Transmission (2017) Downloads
Working Paper: The currency dimension of the bank lending channel in international monetary transmission (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jinteco.2020.103309

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2023-01-16
Handle: RePEc:eee:inecon:v:125:y:2020:i:c:s0022199618301818