CFM Discussion Paper: Global Footprints of Monetary Policies

Author(s): Silvia Miranda-Agrippino, Tsvetelina Nenova and Helene Rey Date: October 2020 Abstract: We study the international transmission of the monetary policy of the two world’s giants: China and the US. From East to West, the channels of global transmission differ markedly. US monetary policy shocks affect the global economy primarily through their effects on integrated[…]

NBER Working Paper: Arbitrage Capital of Global Banks

Author(s): Alyssa G. Anderson, Wenxin Du and Bernd Schlusche Date: April 2021 Abstract: We show that the role of unsecured, short-term wholesale funding for global banks has changed significantly in the post-financial-crisis regulatory environment. Global banks mainly use such funding to finance liquid, near risk-free arbitrage positions—in particular, the interest on excess reserves arbitrage and[…]

ECB Working Paper: On the interaction between monetary and macroprudential policies

Author(s): Alberto Martin, Caterina Mendicino and Alejandro Van der Ghote Date: February 2021 Abstract: The Global Financial Crisis fostered the design and adoption of macroprudential policies throughout the world. This raises important questions for monetary policy. What, if any, is the relationship between monetary and macroprudential policies? In particular, how does the effectiveness of macroprudential[…]

IHEID Working Paper: A fistful of dollars: Transmission of global funding shocks to EMs (Updated Version)

Author(s): Shekhar Hari Kumar and Aakriti Mathur Date: February 2021 Abstract: In this paper, we study transmission of global funding shocks to emerging economies (EMs) from the perspective of interbank markets. Money markets enable banks to engage in risk-sharing against liquidity shocks and are sensitive to global funding conditions. Accordingly, we first show that interbank[…]

Who Lends Before Banking Crises? Evidence from the International Syndicated Loan Market

Author(s):Mariassunta Giannetti and Yeejin Jang Date:January 2021 Abstract: We show that foreign lenders and low market share lenders extend more credit in comparison to other lenders during lending booms leading to banking crises, but not during other credit expansions. Less established lenders also increase the amount of credit they extend to riskier borrowers, without asking[…]

GSIB Status and Corporate Lending: An International Analysis

Author(s):Hans Degryse, Mike Mariathasan and Thi Hien Tang Date:January 2021 Abstract: Global Systemically Important Banks (GSIBs) benefit from implicit government guarantees but face additional capital requirements and oversight. This paper examines the effectiveness of the Financial Stability Board’s recently introduced GSIB-framework and its short-run implications for the real economy, by exploiting the leak of a[…]

IMF Working Paper: Financial Globalization and Inequality: Capital Flows as a Two-Edged Sword

Author(s): Barry J. Eichengreen, Balazs Csonto, Asmaa A ElGanainy and Zsoka Koczan Date: January 2021 Abstract: We review the debate on the association of financial globalization with inequality. We show that the within-country distributional impact of capital account liberalization is context specific and that different types of flows have different distributional effects. Their overall impact[…]

CEPR Working Paper: Why Does Capital Flow from Equal to Unequal Countries?

Author(s): Sergio de Ferra, Kurt Mitman and Federica Romei Date: January 2021 Abstract: Capital flows from equal to unequal countries. We document this empirical regularity in a large sample of advanced economies. The capital flows are largely driven by private savings. We propose a theory that can rationalize these findings: more unequal countries endogenously develop[…]