A Global Lending Channel Unplugged? Does U.S. Monetary Policy Affect Cross-border and Affiliate Lending by Global U.S. Banks?

Steven Ongena, Ann Owen and Judit Temesvary

No 2018-008, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We examine how U.S. monetary policy affects the international activities of U.S. Banks. We access a rarely studied U.S. bank-level regulatory dataset to assess at a quarterly frequency how changes in the U.S. Federal funds rate (before the crisis) and quantitative easing (after the onset of the crisis) affects changes in cross-border claims by U.S. banks across countries, maturities and sectors, and also affects changes in claims by their foreign affiliates. We find robust evidence consistent with the existence of a potent global bank lending channel. In response to changes in U.S. monetary conditions, U.S. banks strongly adjust their cross-border claims in both the pre and post-crisis period. However, we also find that U.S. bank affiliate claims respond mainly to host country monetary conditions.

Keywords: Bank lending channel; Cross-country analysis; Global banking; Monetary transmission (search for similar items in EconPapers)
JEL-codes: E44 E52 F42 G15 G21 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2018-02-02
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (70)

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https://www.federalreserve.gov/econres/feds/files/2018008pap.pdf (application/pdf)

Related works:
Journal Article: A global lending channel unplugged? Does U.S. monetary policy affect cross-border and affiliate lending by global U.S. banks? (2018)
Working Paper: A Global Lending Channel Unplugged? Does U.S. Monetary Policy Affect Cross-border and Affiliate Lending by Global U.S. Banks? (2015)
Working Paper: A global lending channel unplugged? Does U.S. monetary policy affect cross-border and affiliate lending by global U.S. banks? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2018-08

DOI: 10.17016/FEDS.2018.008

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