International Bank Lending Channel of Monetary Policy
IMF Working Papers, November 1, 2019
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- International Bank Lending Channel of Monetary Policy
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Bibliographic details
- Authors: Silvia Albrizio, Sangyup Choi, Davide Furceri, Chansik Yoon
- Published: November 1, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513518770.001
Authors and Publication
- By Silvia Albrizio, Sangyup Choi, Davide Furceri, Chansik Yoon
- November 1, 2019
- IMF Working Papers, Working Paper No. 2019/234
- Volume: 2019; Issue: 234; Pages: 61
- DOI: https://doi.org/10.5089/9781513518770.001
- Stock No: WPIEA2019234
- ISBN: 9781513518770
- ISSN: 1018-5941
Research Question and Scope
- How does domestic monetary policy in systemic countries spillover to the rest of the world?
- Focus: transmission channel of domestic monetary policy in the cross-border context.
- Geographic/sectoral scope: systemically important economies, including the U.S., and bilateral cross-border bank lending.
Methodology
- Use of exogenous shocks to monetary policy in systemically important economies, including the U.S.
- Estimation approach: local projections to estimate the dynamic effect of monetary policy shocks on bilateral cross-border bank lending.
Key Findings
- An increase in funding costs following an exogenous monetary tightening leads to a statistically and economically significant decline in cross-border bank lending.
- The effect is weakened during periods of high uncertainty.
- The effect is found to not vary according to the degree of borrower country riskiness, which weakens support for the international portfolio rebalancing channel.
Keywords and Subjects
- Subjects: Bank credit, Central bank policy rate, Cross-border banking, Financial services, International banking, Monetary policy, Monetary tightening, Money
- Keywords: Bank credit, Central bank policy rate, channel of monetary policy, Cross-border banking, Cross-border banking flows, FOMC monetary policy announcement, Global, Global financial cycles, International bank lending channel, International banking, lending channel, Local projections, monetary policy action, monetary policy shock, Monetary policy spillovers, Monetary tightening, shock series, standard error, WP
Document Details and Access
- Format information: Preview citation provided in Chicago format; PDF available for download.
- Citation example provided: Silvia Albrizio, Sangyup Choi, Davide Furceri, and Chansik Yoon. "International Bank Lending Channel of Monetary Policy", IMF Working Papers 2019, 234 (2019), accessed 9/18/2026, https://doi.org/10.5089/9781513518770.001
Source: IMF Working Paper "International Bank Lending Channel of Monetary Policy" (Working Paper No. 2019/234).
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- Working Paper