Global Factors in Non-core Bank Funding and Exchange Rate Flexibility

Catão, Luís, Jan Ditzen and Daniel te Kaat

No 18643, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We show that fluctuations in the ratio of non-core to core funding in the banking systems of advanced economies are driven by a handful of global factors of both real and financial natures, with country-specific factors playing no significant roles. Exchange rate flexibility helps insulate the non-core to core ratio from such global factors but only significantly so outside periods of major global shocks, as in 2007-2009 and 2020.

JEL-codes: F32 F34 G15 G21 (search for similar items in EconPapers)
Date: 2023-11
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Working Paper: Global Factors in Non-core Bank Funding and Exchange Rate Flexibility (2025)
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