Nonbank lenders as global shock absorbers: Evidence from US Monetary Policy spillovers

Arbeitspapier

We show that nonbank lenders act as global shock absorbers from US monetary policy spillovers. We exploit loan-level data from the global syndicated lending market and US monetary policy surprises. When US policy tightens, nonbanks increase dollar credit supply to non-US firms (relative to banks), mitigating the dollar credit reduction. This increase is stronger for riskier firms, proxied by emerging market firms, high-yield firms, or firms in countries with stronger capital inflow restrictions. However, firm-lender matching, zombie lending, fragile-nonbank lending, or periods of low vs higher local GDP growth do not drive these results. Furthermore, the substitution from bank to nonbank credit has firm-level real effects. Consistent with a funding-based mechanism, when US monetary policy tightens, non-US nonbanks increase short-term dollar debt funding, relative to banks. In sum, despite increased risk-taking by less regulated and more fragile nonbanks (relative to banks), access to nonbank credit reduces the volatility in capital flows-and associated economic activity-stemming from US monetary policy spillovers, with important implications for theory and policy.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. WP 2023-29

Klassifikation und Themen

• Klassifikation: Wirtschaft ; International Lending and Debt Problems ; International Policy Coordination and Transmission ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors ; Financial Institutions and Services: Government Policy and Regulation
• Thema: Nonbank lending ; International monetary policy spillovers ; Global financial cycle ; Banks ; US dollar funding for non-US firms

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Elliott, David ; Meisenzahl, Ralf R. ; Peydró, José-Luis
• Ereignis: Veröffentlichung
• (wer): Federal Reserve Bank of Chicago
• (wo): Chicago, IL
• (wann): 2023

Weitere Informationen

• DOI: doi:10.21033/wp-2023-29
• Handle: http://hdl.handle.net/10419/284070
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ