Title

Global Banking And The Balance Sheet Channel Of Monetary Transmission

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.

Publication Date

9-1-2012

Publication Title

International Journal of Central Banking

Volume

8

Issue

3

Number of Pages

141-175

Document Type

Article

Personal Identifier

scopus

Socpus ID

84865967168 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/84865967168

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