International Spillovers of Monetary Policy: Evidence from France and Italy

Schmidt, Julia; Caccavaio, Marianna; Carpinelli, Luisa; Marinelli, Giuseppe

doi:10.2139/ssrn.3230611

“…net intragroup funding, and are thus less financially constrained after facing a tightening in US monetary policy. Even in France, a large developed economy within a currency union, banks reduce their credit supply at home when US monetary policy tightens (Schmidt, Caccavaio, Carpinelli, and Marinelli 2017). French banks may rely to a large extent on US dollar funding, mostly via their affiliate network in the US, which channels US dollar funds to the headquarters in France.…”

mentioning

confidence: 99%

“… See Argimon, Bonner, Correa, Duijm, Frost, de Haan, de Haan, and Stebunovs (2017); Auer, Friedrich, Ganarin, Peligrova and Towbin (2017); Avdjiev, Koch, McGuire, and von Peter (2017); Barbosa, Bonfim, Costa and Everett (2017); Gajewski, Jara, Kang, Mok, Moreno, and Serwa (2017);Gräb and Zochowski (2017);Hills, Ho, Reinhardt, Sowerbutts, Wong and Wu (2017);Kruglova and Styrin (2017); Loeffler, Segalla, Valitova and Vogel (2017);and Schmidt, Caccavaio, Carpinelli and Marinelli (2017).…”

mentioning

confidence: 99%

The international transmission of monetary policy

Buch

¹

,

Bussière

²

,

Goldberg

³

et al. 2019

Journal of International Money and Finance

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This paper presents the novel results from an internationally coordinated project by the International Banking Research Network (IBRN) on the cross-border transmission of conventional and unconventional monetary policy through banks. Teams from seventeen countries use confidential micro-banking data for the years 2000 through 2015 to explore the international transmission of monetary policies of the U.S., euro area, Japan, and United Kingdom. Two other studies use international data with different degrees of granularity. International spillovers into lending to the private sector do occur, especially for U.S. policies, and bank-specific heterogeneity influences the magnitudes of transmission. The effects are supportive of the international bank lending channel and the portfolio channel of monetary policy transmission. They also show that the frictions that banks face matter; in particular, foreign currency funding and hedging considerations can be a key source of heterogeneity. The forms of bank balance sheet heterogeneity that differentiate spillovers across banks are not uniform across countries. International spillovers into lending can be large for some banks, even while the average international spillovers of policies into nonbank lending generally are not large.

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“… See Argimon, Bonner, Correa, Duijm, Frost, de Haan, de Haan, and Stebunovs (2017); Auer, Friedrich, Ganarin, Peligrova and Towbin (2017); Avdjiev, Koch, McGuire, and von Peter (2017); Barbosa, Bonfim, Costa and Everett (2017); Gajewski, Jara, Kang, Mok, Moreno, and Serwa (2017);Gräb and Zochowski (2017);Hills, Ho, Reinhardt, Sowerbutts, Wong and Wu (2017);Kruglova and Styrin (2017); Loeffler, Segalla, Valitova and Vogel (2017);and Schmidt, Caccavaio, Carpinelli and Marinelli (2017).…”

mentioning

confidence: 99%

The International Transmission of Monetary Policy

Buch¹,

Bussière²,

Hills³

2018

View full text Add to dashboard Cite

This paper presents the novel results from an internationally coordinated project by the International Banking Research Network (IBRN) on the cross-border transmission of conventional and unconventional monetary policy through banks. Teams from seventeen countries use confidential micro-banking data for the years 2000 through 2015 to explore the international transmission of monetary policies of the U.S., euro area, Japan, and United Kingdom. Two other studies use international data with different degrees of granularity. International spillovers into lending to the private sector do occur, especially for U.S. policies, and bank-specific heterogeneity influences the magnitudes of transmission. The effects are supportive of the international bank lending channel and the portfolio channel of monetary policy transmission. They also show that the frictions that banks face matter; in particular, foreign currency funding and hedging considerations can be a key source of heterogeneity. The forms of bank balance sheet heterogeneity that differentiate spillovers across banks are not uniform across countries. International spillovers into lending can be large for some banks, even while the average international spillovers of policies into nonbank lending generally are not large.

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“…Gajewski et al (2019) document the importance of bank lending in the transmission of foreign monetary policies for Chile, Korea and Poland. The international bank lending channel has also been confirmed for Italy and France in Schmidt et al (2018). Argimon et al (2019) look at the other side of the coin in their study for the Netherlands, Spain, and the U.S., showing that banks transmit domestic monetary policy internationally.…”

Section: Introductionmentioning

confidence: 82%