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International spillovers of monetary policy: evidence from France and Italy

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

No 2216, Working Paper Series from European Central Bank

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 based on the reliance on funding sources located in these two countries or denominated in their currency. We find that US monetary policy tightening leads to a reduction of lending to the domestic economy in both France and Italy, and this is mainly driven by banks that relied more intensely on USD funding markets. Conversely, we find that both French and Italian banks are isolated from UK monetary policy shocks, as most of their UK funding is denominated in Euro, despite being larger than funding from the US. JEL Classification: E51, F30, F42, G20

Keywords: bank lending channel; foreign funding; global banks (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mon and nep-opm
Date: 2018-12
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Related works:
Journal Article: 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
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20182216

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