International Spillovers and Local Credit Cycles

Kalemli-Özcan, Sebnem, Julian di Giovanni, Mehmet Ulu and Yusuf Baskaya
Authors registered in the RePEc Author Service: Sebnem Kalemli-Ozcan

No 11839, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies the transmission of the Global Financial Cycle (GFC) to domestic credit market conditions in a large emerging market, Turkey, over 2003-13. We use administrative data covering the universe of corporate credit transactions matched to bank balance sheets to document four facts: (1) an easing in global financial conditions leads to lower borrowing costs and an increase in local lending; (2) domestic banks more exposed to international capital markets transmit the GFC locally; (3) the fall in local currency borrowing costs is larger than foreign currency borrowing costs due to the comovement of the uncovered interest rate parity (UIP) premium with the GFC over time; (4) data on posted collateral for new loan issuances show that collateral constraints do not relax during the boom phase of the GFC.

Keywords: Global financial cycle; Bank credit; Non-core funding; risk premium; Collateral constraints (search for similar items in EconPapers)
JEL-codes: E0 F0 F1 (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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Related works:
Journal Article: International Spillovers and Local Credit Cycles (2022)
Working Paper: International spillovers and local credit cycles (2020)
Working Paper: International Spillovers and Local Credit Cycles (2017)
Working Paper: International Spillovers and Local Credit Cycles (2017)
Working Paper: International Spillovers and Local Credit Cycles (2017)
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