EconPapers    
Economics at your fingertips  
 

How does the interaction of macroprudential and monetary policies affect cross-border bank lending?

Elod Takats and Judit Temesvary ()

Journal of International Economics, 2021, vol. 132, issue C

Abstract: We combine a rarely accessed BIS database on cross-border lending flows with cross-country data on macroprudential regulations. We find significant interactions between the monetary policy of major international currency issuers (USD, EUR and JPY) and macroprudential policies in source (home) lending banking systems. Consistent with the bank lending channel, macroprudential easing in a home country amplifies the effect of currency issuers' monetary policy on lending. For instance, UK macroprudential easing amplifies the negative impact of US monetary policy tightening on USD-denominated cross-border bank lending outflows from UK banks. Vice versa, tighter macroprudential policy mitigates these effects.

Keywords: Monetary policy; Macroprudential policy; Cross-border claims; Diff-in-diff (search for similar items in EconPapers)
JEL-codes: F34 F42 G21 G38 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S002219962100101X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: How does the interaction of macroprudential and monetary policies affect cross-border bank lending? (2019) Downloads
Working Paper: How does the interaction of macroprudential and monetary policies affect cross-border bank lending? (2019) 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: https://EconPapers.repec.org/RePEc:eee:inecon:v:132:y:2021:i:c:s002219962100101x

DOI: 10.1016/j.jinteco.2021.103521

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 2022-01-11
Handle: RePEc:eee:inecon:v:132:y:2021:i:c:s002219962100101x