Cao, J and Dinger, V (2022) Financial Globalization and Bank Lending: The Limits of Domestic Monetary Policy. Journal of Financial and Quantitative Analysis, 57 (8). pp. 3223-3251. ISSN 0022-1090
Abstract
Exploring bank-level data from a small open economy, we present evidence that global funding conditions limit the effectiveness of domestic monetary policy in terms of shaping both the volume and the riskiness of bank lending. We show that more favorable global funding conditions associated with a local currency appreciation encourage banks to increase lending, leverage up, take more risks, and thus insulate themselves from lean-against-the-wind domestic monetary policy. These results support the existence of a risk-taking channel of currency appreciation at the bank level.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © The Author(s), 2022. This is an open access article under the terms of the Creative Commons Attribution License (CC-BY 4.0), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 07 May 2021 14:17 |
Last Modified: | 01 Mar 2023 13:14 |
Status: | Published |
Publisher: | Cambridge University Press |
Identification Number: | 10.1017/S0022109022000539 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:173632 |