Eguren‐Martin, Fernando; Ossandon Busch, Matias; … - In: Journal of Money, Credit and Banking 56 (2023) 1, pp. 115-152
This paper examines the effect of dislocations in foreign currency (FX) swap markets (“CIP deviations”) on bank lending. Using data from UK banks we show that when the cost of obtaining swap-based funds in a particular foreign currency increases, banks reduce the supply of cross-border...
