Banking sector globalization and monetary policy transmission: Evidence from Asian countries

Seungyoon Lee and Christopher Bowdler

Journal of International Money and Finance, 2019, vol. 93, issue C, 101-116

Abstract: Cetorelli and Goldberg (2012a) have shown that U.S. global banks (those with foreign subsidiaries) can smooth the effects of monetary policy tightening on their lending through drawing on subsidiary resources, giving a hampering of policy transmission. In panel data for Asian banks we find strong evidence of the hampering of policy transmission to interest rates on bank loans, and weaker evidence of hampering in transmission to lending quantities. We also present evidence that financial interdependence within global banks is consistent with the internal capital markets hypothesis that underpins reduced transmission of monetary policy in a globalized banking system.

Keywords: Global banks; Monetary policy transmission; Bank lending channel; Panel data (search for similar items in EconPapers)
JEL-codes: E44 E50 F34 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:93:y:2019:i:c:p:101-116

DOI: 10.1016/j.jimonfin.2018.12.011

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