The international transmission of monetary policy

Claudia Buch, Matthieu Bussiere, Linda Goldberg and Robert Hills

No 845, Staff Reports from Federal Reserve Bank of New York

Abstract: This paper presents the novel results from an internationally coordinated project by the International Banking Research Network (IBRN) on the cross-border transmission of conventional and unconventional monetary policy through banks. Teams from seventeen countries use confidential micro-banking data for the years 2000 through 2015 to explore the international transmission of monetary policies of the United States, the euro area, Japan, and the United Kingdom. Two other studies use international data with different degrees of granularity. International spillovers into lending to the private sector do occur, especially for U.S. policies, and bank-specific heterogeneity influences the magnitudes of transmission. The effects are supportive of the international bank lending channel and the portfolio channel of monetary policy transmission. They also show that the frictions that banks face matter; in particular, foreign currency funding and hedging considerations can be a key source of heterogeneity. The forms of bank balance sheet heterogeneity that differentiate spillovers across banks are not uniform across countries. International spillovers into lending can be large for some banks, even while the average international spillovers of policies into nonbank lending generally are not large.

Keywords: monetary policy; international spillovers; cross-border transmission; global banks; global financial cycle (search for similar items in EconPapers)
JEL-codes: E52 F3 F4 G15 G21 (search for similar items in EconPapers)
Date: 2018-03-01
New Economics Papers: this item is included in nep-cba, nep-eec, nep-ifn, nep-mac, nep-mon and nep-opm
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Citations: View citations in EconPapers (23)

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Related works:
Journal Article: The international transmission of monetary policy (2019)
Working Paper: The international transmission of monetary policy (2018)
Working Paper: The International Transmission of Monetary Policy (2018)
Working Paper: The International Transmission of Monetary Policy (2018)
Working Paper: The international transmission of monetary policy (2018)
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