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The international transmission of monetary policy

Author

Listed:
  • Buch, Claudia M.

    (Deutsche Bundesbank)

  • Bussiere, Matthieu

    (Banque de France)

  • Goldberg, Linda S.

    (Federal Reserve Bank of New York)

  • Hills, Robert

    (Bank of England)

Abstract

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 United States, the euro area, Japan, and the 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.

Suggested Citation

  • Buch, Claudia M. & Bussiere, Matthieu & Goldberg, Linda S. & Hills, Robert, 2018. "The international transmission of monetary policy," Staff Reports 845, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:845
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bahaj, Saleem & Reis, Ricardo, 2018. "Central Bank Swap Lines," Bank of England working papers 741, Bank of England.
    2. Isabel Argimón & Clemens Bonner & Ricardo Correa & Patty Duijm & Jon Frost & Jakob de Haan & Leo de Haan & Viktors Stebunovs, 2018. "Financial institutions' business models and the global transmission of monetary policy," Working Papers 1815, Banco de España;Working Papers Homepage.
    3. Saleem Bahaj & Ricardo Reis, 2018. "Central Bank Swap Lines," CESifo Working Paper Series 7124, CESifo Group Munich.
    4. Hills, Robert & Ho, Kelvin & Reinhardt, Dennis & Sowerbutts, Rhiannon & Wong, Eric & Wu, Gabriel, 2017. "The international transmission of monetary policy through financial centres: evidence from the United Kingdom and Hong Kong," Bank of England working papers 682, Bank of England.
    5. Saleem Bahaj & Ricardo Reis, 2018. "Central Bank Swap Lines," Discussion Papers 1816, Centre for Macroeconomics (CFM).
    6. Julia Schmidt & Marianna Caccavaio & Luisa Carpinelli & Giuseppe Marinelli, 2018. "International Spillovers of Monetary Policy: Evidence from France and Italy," Working papers 689, Banque de France.
    7. Andrew Filardo & Pierre Siklos, 2018. "The cross-border credit channel and lending standards surveys," BIS Working Papers 723, Bank for International Settlements.

    More about this item

    Keywords

    monetary policy; international spillovers; cross-border transmission; global bank; global financial cycle;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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