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Dollar funding and French exports to the United States: lessons from the 2011 dollar crunch

Author

Listed:
  • Antoine BERTHOU
  • Jean-Stéphane MÉSONNIER
  • Guillaume HORNY

Abstract

This Rue de la Banque analyses the effects of a lesser availability of dollar funding on the export performance of French companies on the US market. It shows that the sudden drying up of cross-border dollar funding of French banks in the summer of 2011, triggered by the euro area sovereign debt crisis, led to a relative decline in exports of goods to the United States for at least a year. The effect of this shock is equivalent to that of raising tariffs by two to five percentage points. This study highlights the importance of supply factors related to bank financing from the perspective of France’s export competitiveness.

Suggested Citation

  • Antoine BERTHOU & Jean-Stéphane MÉSONNIER & Guillaume HORNY, 2018. "Dollar funding and French exports to the United States: lessons from the 2011 dollar crunch," Rue de la Banque, Banque de France, issue 62, May.
    • Handle: RePEc:bfr:rueban:2018:62
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    References listed on IDEAS

    as
    1. Antoine Berthou & Lionel Fontagné, 2016. "Variable Trade Costs, Composition Effects and the Intensive Margin of Trade," The World Economy, Wiley Blackwell, vol. 39(1), pages 54-71, January.
    2. Gita Gopinath & Oleg Itskhoki & Roberto Rigobon, 2010. "Currency Choice and Exchange Rate Pass-Through," American Economic Review, American Economic Association, vol. 100(1), pages 304-336, March.
    3. Ingo Fender & Patrick McGuire, 2010. "European banks' US dollar funding pressures," BIS Quarterly Review, Bank for International Settlements, June.
    4. Victoria Ivashina & David S. Scharfstein & Jeremy C. Stein, 2015. "Dollar Funding and the Lending Behavior of Global Banks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(3), pages 1241-1281.
    5. Mary Amiti & Oleg Itskhoki & Jozef Konings, 2016. "International Shocks and Domestic Prices: How Large Are Strategic Complementarities?," NBER Working Papers 22119, National Bureau of Economic Research, Inc.
    6. A. Berthou & G. Horny & J-S. Mésonnier, 2018. "Dollar Funding and Firm-Level Exports," Working papers 666, Banque de France.
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