Foreign banks and international transmission of monetary policy: Evidence from the Syndicated loan market

Asli Demirgüç-Kunt; Balint L Horvath; Harry Huizinga

doi:10.1016/j.euroecorev.2020.103542

Foreign banks and international transmission of monetary policy: Evidence from the Syndicated loan market

Asli Demirgüç-Kunt, Balint L Horvath, Harry Huizinga^*

^*Corresponding author for this work

School of Accounting and Finance - Business School

Research output: Contribution to journal › Article (Academic Journal) › peer-review

9 Citations (Scopus)

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Abstract

This paper examines how the sensitivity of cross-border syndicated loan supply varies with the internationalization of borrower country banking sectors, banks and loan syndicates. A higher foreign bank presence in borrower countries mitigates the transmission of monetary policy. Prior lending experience of international banks in borrower countries also attenuates monetary transmission. In contrast, to the extent they become more international, the credit supply of banks and loan syndicates becomes more sensitive to lender-country monetary policy

Original language	English
Article number	103542
Number of pages	17
Journal	European Economic Review
Volume	129
Early online date	21 Jul 2020
DOIs	https://doi.org/10.1016/j.euroecorev.2020.103542
Publication status	Published - 1 Oct 2020

Research Groups and Themes

AF Banking

Keywords

Cross-border lending
Monetary transmission
Foreign ownership of banks

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10.1016/j.euroecorev.2020.103542

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This is the author accepted manuscript (AAM). The final published version (version of record) is available online via Elsevier at https://www.sciencedirect.com/science/article/pii/S0014292120301732. Please refer to any applicable terms of use of the publisher.
Accepted author manuscript, 666 KBLicence: CC BY-NC-ND

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title = "Foreign banks and international transmission of monetary policy: Evidence from the Syndicated loan market",

abstract = "This paper examines how the sensitivity of cross-border syndicated loan supply varies with the internationalization of borrower country banking sectors, banks and loan syndicates. A higher foreign bank presence in borrower countries mitigates the transmission of monetary policy. Prior lending experience of international banks in borrower countries also attenuates monetary transmission. In contrast, to the extent they become more international, the credit supply of banks and loan syndicates becomes more sensitive to lender-country monetary policy",

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AU - Huizinga, Harry

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N2 - This paper examines how the sensitivity of cross-border syndicated loan supply varies with the internationalization of borrower country banking sectors, banks and loan syndicates. A higher foreign bank presence in borrower countries mitigates the transmission of monetary policy. Prior lending experience of international banks in borrower countries also attenuates monetary transmission. In contrast, to the extent they become more international, the credit supply of banks and loan syndicates becomes more sensitive to lender-country monetary policy

AB - This paper examines how the sensitivity of cross-border syndicated loan supply varies with the internationalization of borrower country banking sectors, banks and loan syndicates. A higher foreign bank presence in borrower countries mitigates the transmission of monetary policy. Prior lending experience of international banks in borrower countries also attenuates monetary transmission. In contrast, to the extent they become more international, the credit supply of banks and loan syndicates becomes more sensitive to lender-country monetary policy

KW - Cross-border lending

KW - Monetary transmission

KW - Foreign ownership of banks

U2 - 10.1016/j.euroecorev.2020.103542

DO - 10.1016/j.euroecorev.2020.103542

M3 - Article (Academic Journal)

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JO - European Economic Review

JF - European Economic Review

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Foreign banks and international transmission of monetary policy: Evidence from the Syndicated loan market

Abstract

Research Groups and Themes

Keywords

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