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

Előd Takáts and Judit Temesvary

We combine a rarely accessed BIS database on bilateral cross-border lending flows with cross-country data on macroprudential regulations. We study the interaction between the monetary policy of major international currency issuers (USD, EUR and JPY) and macroprudential policies enacted in source (home) lending banking systems. We find significant interactions. Tighter macroprudential policy in a home country mitigates the impact on lending of monetary policy of a currency issuer. For instance, macroprudential tightening in the UK mitigates the negative impact of US monetary tightening on USD-denominated cross-border bank lending outflows from UK banks. Vice-versa, easier macroprudential policy amplifies impacts. The results are economically significant

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Year of publication:	May 2019 ; This draft: May 2019
Authors:	Takáts, Előd ; Temesvary, Judit
Publisher:	Washington, D.C. : Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board
Subject:	Geldpolitik \| Monetary policy \| Kreditgeschäft \| Bank lending \| Finanzmarktaufsicht \| Financial supervision \| Internationale Bank \| International bank \| Geldpolitische Transmission \| Monetary transmission

Extent:	1 Online-Ressource (circa 39 Seiten) Illustrationen
Series:	Finance and economics discussion series. - Washington, DC : Board of Governors of the Federal Reserve System, ZDB-ID 2670319-1. - Vol. 2019, 045 FEDS Working Paper ; No. 2019-045
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper
Language:	English
Classification:	F34 - International Lending and Debt Problems ; F42 - International Policy Coordination and Transmission ; G38 - Government Policy and Regulation ; G21 - Banks; Other Depository Institutions; Mortgages
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012181321