Global Banking and the Balance Sheet Channel of Monetary Transmission

    Authors

    S. Alpanda;U. Aysun

    Comments

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    Abbreviated Journal Title

    Int. J. Cent. Bank.

    Keywords

    POLICY TRANSMISSION; BUSINESS CYCLES; MARKETS; Business, Finance

    Abstract

    The literature typically finds that the development of financial markets has decreased the ability of central banks to affect the real economy. This paper shows that this negative relationship does not hold between the balance sheet channel of monetary transmission and bank globalization-one aspect of financial development. The reason is that global banks are more sensitive to their borrowers' leverage. By affecting this leverage, monetary policy has a larger impact on global banks' lending and aggregate economic activity. We use bank-level Call Report data to find this disparity between more and less global banks.

    Journal Title

    International Journal of Central Banking

    Volume

    8

    Issue/Number

    3

    Publication Date

    1-1-2012

    Document Type

    Article

    Language

    English

    First Page

    141

    Last Page

    175

    WOS Identifier

    WOS:000308580300004

    ISSN

    1815-4654

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