EconPapers    
Economics at your fingertips  
 

International spillovers of monetary policy: Evidence from France and Italy

Julia Schmidt (), Marianna Caccavaio, Luisa Carpinelli and Giuseppe Marinelli

Journal of International Money and Finance, 2018, vol. 89, issue C, 50-66

Abstract: In this paper we provide empirical evidence on the impact of US and UK monetary policy changes on credit supply of banks operating in Italy and France over the period 2000–2015, exploring the existence of an international bank lending channel. Exploiting bank balance sheet heterogeneity, we find that monetary policy tightening abroad leads to a reduction of credit supply at home, in particular for US monetary policy changes. Our results show that USD funding plays an important role in the transmission mechanism, especially for French banks which rely to a larger extent on USD funding. We also show that banks adjust their euro and foreign currency lending differently, thus implying that funding sources in different currencies are not perfect substitutes. This is especially the case when tensions in currency swap markets are high, thus resulting in costly cross-currency funding.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0261560618305138
Full text for ScienceDirect subscribers only

Related works:
Working Paper: International Spillovers of Monetary Policy: Evidence from France and Italy (2018) Downloads
Working Paper: International spillovers of monetary policy: evidence from France and Italy (2018) 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:jimfin:v:89:y:2018:i:c:p:50-66

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-11-21
Handle: RePEc:eee:jimfin:v:89:y:2018:i:c:p:50-66