How does the interaction of macroprudential and monetary policies affect cross-border bank lending?

A-Tier
Journal: Journal of International Economics
Year: 2021
Volume: 132
Issue: C

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We combine a rarely accessed BIS database on cross-border lending flows with cross-country data on macroprudential regulations. We find significant interactions between the monetary policy of major international currency issuers (USD, EUR and JPY) and macroprudential policies in source (home) lending banking systems. Consistent with the bank lending channel, macroprudential easing in a home country amplifies the effect of currency issuers' monetary policy on lending. For instance, UK macroprudential easing amplifies the negative impact of US monetary policy tightening on USD-denominated cross-border bank lending outflows from UK banks. Vice versa, tighter macroprudential policy mitigates these effects.

Technical Details

RePEc Handle
repec:eee:inecon:v:132:y:2021:i:c:s002219962100101x
Journal Field
International
Author Count
2
Added to Database
2026-01-29