EconPapers    
Economics at your fingertips  
 

Global banking and the balance sheet channel of monetary transmission

Uluc Aysun () and Sami Alpanda ()
Additional contact information
Sami Alpanda: Amherst College, Amherst, MA

No 2011-04, Working Papers from University of Central Florida, Department of Economics

Abstract: The literature typically finds that the development of financial markets has decreased the ability of central banks to affect the real economy. This paper shows that this negative relationship does not hold between the balance sheet channel of monetary transmission and bank globalization -- one aspect of financial development. The reason is that global banks are more sensitive to their borrowers’ leverage. By affecting this leverage, monetary policy has a larger impact on global banks’ lending and aggregate economic activity. We use bank-level, Call Report data to find this disparity between more and less global banks. We then use these data in the estimation of a general equilibrium model and find that the balance sheet channel of monetary transmission operates mainly through more global banks.

Keywords: balance sheet channel; bank globalization; financial accelerator (search for similar items in EconPapers)
JEL-codes: E44 E51 F31 F41 (search for similar items in EconPapers)
Date: 2011-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://economics.itweb.ucf.edu/workingpapers/2011-04.pdf Full text (application/pdf)

Related works:
Journal Article: Global Banking and the Balance Sheet Channel of Monetary Transmission (2012) 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:cfl:wpaper:2011-04

Access Statistics for this paper

More papers in Working Papers from University of Central Florida, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by John Paul ().

 
Page updated 2019-10-25
Handle: RePEc:cfl:wpaper:2011-04