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The effect of unconventional monetary policy on cross-border bank loans: Evidence from an emerging market


Alper, Koray; Altunok, Fatih; Çapacıoğlu, Taniu; Ongena, Steven (2020). The effect of unconventional monetary policy on cross-border bank loans: Evidence from an emerging market. European Economic Review, 127:103426.

Abstract

We analyze the impact of quantitative easing by the Federal Reserve, European Central Bank and Bank of England on cross‐border credit flows. Relying on comprehensive loan‐level data, we find that Fed QE strongly boosts cross‐border credit granted to Turkish banks by banks located in the US, Euro Area and UK, while ECB and BoE QEs work only moderately through banks in the EA and UK, respectively. In general QE works at short maturities across bank locations and loan currencies, more strongly for weaker lenders and borrowers, and may have resulted in maturity mismatches in Turkish banks searching for yield.

Abstract

We analyze the impact of quantitative easing by the Federal Reserve, European Central Bank and Bank of England on cross‐border credit flows. Relying on comprehensive loan‐level data, we find that Fed QE strongly boosts cross‐border credit granted to Turkish banks by banks located in the US, Euro Area and UK, while ECB and BoE QEs work only moderately through banks in the EA and UK, respectively. In general QE works at short maturities across bank locations and loan currencies, more strongly for weaker lenders and borrowers, and may have resulted in maturity mismatches in Turkish banks searching for yield.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Finance
Social Sciences & Humanities > Economics and Econometrics
Language:English
Date:1 August 2020
Deposited On:04 Dec 2020 08:21
Last Modified:28 Jan 2021 21:26
Publisher:Elsevier
ISSN:0014-2921
OA Status:Closed
Free access at:Related URL. An embargo period may apply.
Publisher DOI:https://doi.org/10.1016/j.euroecorev.2020.103426
Related URLs:https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3421459 (Organisation)
https://www.sciencedirect.com/science/article/pii/S0014292120300581 (Publisher)
Other Identification Number:merlin-id:19292

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