Cross-border transmission of emergency liquidity

Konferenzbeitrag

We show that emergency liquidity provision by the Federal Reserve transmitted to non-U.S. banking markets. Based on manually collected holding company structures of international banks, we can identify banks in Germany with access to U.S. facilities via internal capital markets. Using proprietary interest rate data reported to the German central bank, we compare lending and borrowing rates of banks with and without such access. U.S. liquidity shocks cause a significant decrease in the short-term funding costs of German banks with access. Short-term loan rates charged to German corporates also decline, albeit with lags between two and four months. These spillover effects of U.S. monetary policy are confined to short-term rates.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2017: Alternative Geld- und Finanzarchitekturen - Session: International Economics ; No. E01-V3

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Central Banks and Their Policies ; Multinational Firms; International Business ; International Financial Policy: Financial Transactions Tax; Capital Controls ; Financial Crises ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Subject: Monetary policy transmission ; emergency liquidity ; internal capital markets ; interest rates

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kick, Thomas ; Koetter, Michael ; Storz, Manuela
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel, Hamburg
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/168112
• Last update: 10.03.2025, 11:41 AM CET