Author(s):Linda S. Goldberg & Signe Krogstrup Date:January 2023 Abstract: The risk sensitivity of international capital flow pressures is explored using a new Exchange Market Pressure index that combines pressures observed in exchange rate adjustments with model-based estimates of incipient pressures that are masked by foreign exchange interventions and policy rate adjustments. The sensitivity of capital[…]
Author(s):Asli Demirguc-Kunt, Alvaro Pedraza, Fredy Pulga, and Claudia Ruiz-Ortega Date:December 2022 Abstract: What is the response of bank foreign subsidiaries to climate policy in their host countries? This paper finds that global banks with high environmental performance increase their presence in countries after local authorities strengthen their climate-related actions. Through their foreign subsidiaries, these banks[…]
Author(s):Julien Bengui and Louphou Coulibaly Date:November 2022 Abstract: Are unregulated capital flows excessive during a stagflation episode? We argue that they likely are, owing to a macroeconomic externality operating through the economy’s supply side. Inflows raise domestic wages through a wealth effect on labor supply and cause unwelcome upward pressure on marginal costs in countries[…]
Author(s):Mikhail Mamonov, Anna Pestova, and Steven Ongena Date:December 2022 Abstract: We study the impact of global financial sanctions on banks and their corporate borrowers in Russia. Financial sanctions were consecutively imposed between 2014 and 2019, allowing targeted (but not yet sanctioned) banks to adapt their international and domestic exposures in advance. Using a staggered difference-in-differences[…]
Author(s):Carlos Cantú, Catherine Casanova, Rodrigo Alfaro, Fernando Chertman, Gerald Cisneros, Toni dos Santos, Roberto Lobato, Calixto López, Facundo Luna, David Moreno, Miguel Sarmiento and Rafael Nivin Date:November 2022 Abstract: We explore the mechanism that links capital inflows from abroad with domestic bank lending. Five Latin American countries use their credit registry data to examine the[…]
Author(s):Rashad Ahmed and Alessandro Rebucci Date:October 2022 Abstract: This paper shows that the price impact of foreign official (FO) purchases or sales of U.S. Treasuries (USTs) is about twice as large as previously reported in the literature once critical sources of endogeneity are addressed. We also show that prevailing estimates of this price impact suffer[…]
Author(s):Alan M. Taylor, James S. Cloyne, and Patrick Hürtgen Date:October 2022 Abstract: Identifying exogenous variation in monetary policy is crucial for investigating central bank policy transmission. Using newly-collected archival real-time data utilized by the Central Bank Council of the German Bundesbank, we identify unexpected changes in German monetary policy from 580 policy meetings between 1974[…]
Author(s):J. Scott Davis and Andrei Zlate Date:April 2022 Abstract: We estimate the heterogeneous effect of the global financial cycle on exchange rates and cross-border capital flows during the COVID-19 pandemic, using weekly exchange rate and portfolio flow data for a panel of 48 advanced and emerging market economies. We begin by estimating the global financial[…]
Author(s):Indraneel Chakraborty, Saketh Chityala, Apoorva Javadekar, and Rodney Ramcharan Date:July 2022 Abstract: This paper studies how interconnected plants distribute additional liquidity from banks through the supply chain. Using a spatially segmented bank branch expansion rule in India, we find that direct exposure to additional bank credit allows plants to hold less precautionary cash and increase[…]
Author(s):Marina Conesa, Giulia Lotti, and Andrew Powell Date:July 2020 Abstract: Theory suggests both resilience and fragility in banking networks. This paper finds both, exploiting a new database of cross-border syndicated lending to developing countries from 1993 to 2017. Shocks propagate via co-lenders driven by central players, but shocks impacting fringe banks have little impact. The[…]