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

Research output: Contribution to journalArticle (Academic Journal)peer-review

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 languageEnglish
Article number103542
Number of pages17
JournalEuropean Economic Review
Volume129
Early online date21 Jul 2020
DOIs
Publication statusPublished - 1 Oct 2020

Structured keywords

  • AF Banking

Keywords

  • Cross-border lending
  • Monetary transmission
  • Foreign ownership of banks

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