The International Bank Lending Channel of Monetary Policy Rates and QE: Credit Supply, Reach-for-Yield, and Real Effects

Bernardo Morais, Jose-Luis Peydro, Jessica Roldán Peña and Claudia Ruiz Ortega

EconStor Open Access Articles and Book Chapters, 2019, vol. 74, issue 1, 55-90

Abstract: We identify the international credit channel by exploiting Mexican supervisory data sets and foreign monetary policy shocks in a country with a large presence of European and U.S. banks. A softening of foreign monetary policy expands credit supply of foreign banks (e.g., U.K. policy affects credit supply in Mexico via U.K. banks), inducing strong firm-level real effects. Results support an international risk-taking channel and spill overs of core countries’ monetary policies to emerging markets, both in the foreign monetary softening part (with higher credit and liquidity risk-taking by foreign banks) and in the tightening part (with negative local firm-level real effects).

Keywords: monetary policy; financial globalization; quantitative easing (QE); credit supply; risk-taking; foreign banks (search for similar items in EconPapers)
JEL-codes: E52 E58 G01 G21 G28 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (112)

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Related works:
Journal Article: The International Bank Lending Channel of Monetary Policy Rates and QE: Credit Supply, Reach‐for‐Yield, and Real Effects (2019)
Working Paper: The international bank lending channel of monetary policy rates and QE: Credit supply, reach-for-yield, and real effects (2019)
Working Paper: The International Bank Lending Channel of Monetary Policy Rates and QE: Credit Supply, Reach-for-Yield, and Real Effects (2018)
Working Paper: The International Bank Lending Channel of Monetary Policy Rates and QE: Credit Supply, Reach-for-Yield, and Real Effects (2017)
Working Paper: The International Bank Lending Channel of Monetary Policy Rates and QE: Credit Supply, Reach-for-Yield, and Real Effects (2015)
Working Paper: The international bank lending channel of monetary policy rates and QE: Credit supply, reach-for-yield, and real effects (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:225519

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