{
  "title": "Global Liquidity and Drivers of Cross-Border Bank Flows",
  "publication": "IMF Working Papers, April 29, 2014",
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  "summary": "This paper provides a definition of global liquidity consistent with its meaning as the “ease of financing” in international financial markets.",
  "sections": [
    {
      "heading": "Definition and approach",
      "content": "- Provides a definition of global liquidity consistent with its meaning as the “ease of financing” in international financial markets.\n- Uses a longer time series and broader sample of countries than in previous studies to identify global factors driving cross-border bank flows, alongside country-specific factors."
    },
    {
      "heading": "Main empirical findings",
      "content": "- Confirms the explanatory power of US financial conditions for cross-border bank flows:\n  - Flows decrease in market volatility (VIX).\n  - Flows decrease in term premia.\n  - Flows increase in bank leverage.\n  - Flows increase in growth in domestic credit.\n  - Flows increase in M2.\n- New finding: similar variables for other systemic countries are also important:\n  - The UK and the Euro Area variables matter, sometimes even more so than US variables, consistent with the dominant role of European banks in cross-border banking.\n- Recipient country characteristics affect both the level of country-specific flows and the cyclical impact of global liquidity:\n  - Sensitivities of flows to banks decrease with stronger macroeconomic frameworks.\n  - Sensitivities of flows to banks decrease with better bank regulation.\n  - The dampening effect from stronger frameworks and regulation is less pronounced for flows to non-financial firms."
    },
    {
      "heading": "Subject areas and keywords (as stated)",
      "content": "- Subject: Asset and liability management, Banking, Central bank policy rate, Credit, Cross-border banking, Financial services, International liquidity, Money, Yield curve\n- Keywords: bank, bank borrower, bank claim, bank leverage, bank risk-taking, Central bank policy rate, Credit, cross-border bank flow, Cross-border banking, exchange rate, F21, F34, G15, G18, G21, G28, Global, International liquidity, WP, Yield curve\n\n---\n\n Content in this bundle\n\n- PDP-Working Paper\n  - PDP-Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - PDP-Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/global-liquidity-and-drivers-of-cross-border-bank-flows-41511"
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    "Authors: Eugenio M Cerutti, Stijn Claessens, Lev Ratnovski",
    "Published: April 29, 2014",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475517729.001",
    "Provides a definition of global liquidity consistent with its meaning as the “ease of financing” in international financial markets.",
    "Uses a longer time series and broader sample of countries than in previous studies to identify global factors driving cross-border bank flows, alongside country-specific factors.",
    "Confirms the explanatory power of US financial conditions for cross-border bank flows:",
    "New finding: similar variables for other systemic countries are also important:",
    "Recipient country characteristics affect both the level of country-specific flows and the cyclical impact of global liquidity:",
    "Subject: Asset and liability management, Banking, Central bank policy rate, Credit, Cross-border banking, Financial services, International liquidity, Money, Yield curve",
    "Keywords: bank, bank borrower, bank claim, bank leverage, bank risk-taking, Central bank policy rate, Credit, cross-border bank flow, Cross-border banking, exchange rate, F21, F34, G15, G18, G21, G28, Global, International liquidity, WP, Yield curve",
    "**PDP-Working Paper**"
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