Negative rates, monetary policy transmission and cross-border lending via international financial centres
Desislava Andreeva, Andra Coman, Mary Everett, Maren Froemel, Kelvin Ho, Simon Lloyd, Baptiste Meunier, Justine Pedrono, Dennis Reinhardt, Andrew Wong, Eric Wong, Dawid Żochowski
We study the effects of negative interest rate policies (NIRP) on the transmission of monetary policy through cross-border lending. Using bank-level data from international financial centres - the United Kingdom, Hong Kong and Ireland - we examine how NIRP in the economies where banks have their headquarters influences cross-border lending from financial-centre affiliates. We find that NIRP impairs the bank-lending channel for cross-border lending to non-bank sectors, especially for those banks that have only a weak deposit base in IFCs - and are thus relatively more exposed to NIRP in their headquarters. Using euro-area data, including bank-level data from France, we find that NIRP does not influence overall cross-border lending from banks' headquarters' economies, but NIRP does impair lending to financial sectors based in IFCs. This impairment is stronger for banks with a large deposit base in headquarter economies exposed to NIRP.
Year of publication: |
[2023]
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Authors: | Andreeva, Desislava Č. ; Coman, Andra ; Everett, Mary ; Froemel, Maren ; Ho, Kelvin ; Lloyd, Simon ; Meunier, Baptiste ; Pedrono, Justine ; Reinhardt, Dennis ; Wong, Andrew ; Wong, Eric ; Żochowski, Dawid |
Publisher: |
Frankfurt am Main, Germany : European Central Bank |
Subject: | Bank lending | Cross-border lending | International financial centres | Monetary policy | Negative interest rates | Risk-taking | Geldpolitik | Kreditgeschäft | Geldpolitische Transmission | Monetary transmission | Finanzplatz | Financial centre | Zins | Interest rate | Internationaler Finanzmarkt | International financial market | Welt | World | Internationaler Kredit | International credit |
Saved in:
freely available
Extent: | 1 Online-Ressource (circa 68 Seiten) Illustrationen |
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Series: | Working paper series / European Central Bank. - Frankfurt, M. : European Central Bank, ISSN 1725-2806, ZDB-ID 2123559-4. - Vol. no 2775 (February 2023) |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper |
Language: | English |
ISBN: | 978-92-899-5517-1 |
Other identifiers: | 10.2866/350963 [DOI] hdl:10419/278346 [Handle] |
Classification: | E52 - Monetary Policy (Targets, Instruments, and Effects) ; F34 - International Lending and Debt Problems ; F36 - Financial Aspects of Economic Integration ; F42 - International Policy Coordination and Transmission ; G21 - Banks; Other Depository Institutions; Mortgages |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013547998
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