Artikel
Global Banks and Synthetic Funding: The Benefits of Foreign Relatives
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 credit in that currency. This effect is increasing in the degree of banks' reliance on swap-based FX funding. Access to foreign relatives matters as banks employ internal capital markets to shield their cross-border FX lending supply from the described channel. Partial substitution occurs from banks outside the UK not affected by changes in synthetic funding costs.
- Language
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Englisch
- Bibliographic citation
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Journal: Journal of Money, Credit and Banking ; ISSN: 1538-4616 ; Volume: 56 ; Year: 2023 ; Issue: 1 ; Pages: 115-152 ; Hoboken, NJ: Wiley
- Classification
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Wirtschaft
- Subject
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cross‐border bank lending
covered interest rate parity deviations
FX swaps
internal capital markets
- Event
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Geistige Schöpfung
- (who)
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Eguren‐Martin, Fernando
Ossandon Busch, Matias
Reinhardt, Dennis
- Event
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Veröffentlichung
- (who)
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Wiley
- (where)
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Hoboken, NJ
- (when)
-
2023
- DOI
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doi:10.1111/jmcb.13037
- Last update
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10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Eguren‐Martin, Fernando
- Ossandon Busch, Matias
- Reinhardt, Dennis
- Wiley
Time of origin
- 2023
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