Capital Flows, Cross-Border Banking and Global Liquidity
We investigate global factors associated with cross-border capital flows. We formulate a model of gross capital flows through the international banking system and derive a closed form solution that highlights the leverage cycle of global banks as being a prime determinant of the transmission of financial conditions across borders. We then test the predictions of our model in a panel study of 46 countries and find that global factors dominate local factors as determinants of banking sector capital flows.
|Date of creation:||May 2013|
|Publication status:||published as Journal of Monetary Economics Volume 71, April 2015, Pages 119–132 Cover image Capital flows and the risk-taking channel of monetary policy Valentina Brunoa, Hyun Song Shinb, ,|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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"Capital flows and the risk-taking channel of monetary policy,"
Journal of Monetary Economics,
Elsevier, vol. 71(C), pages 119-132.
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