Abstract
Recent developments in international financial markets have highlighted the role of banks in the transmission of shocks across borders. We employ dynamic panel methods for a sample of OECD countries to analyze whether banks’ foreign assets react to macroeconomic shocks at home and abroad. We find that banks reduce their foreign assets in response to a relative increase in domestic interest rates, and they increase their foreign assets when the growth rate of world energy prices rises. The responses are characterized by a temporal overshooting and a dynamic adjustment process that extends over several quarters.
Item Type: | Journal article |
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Faculties: | Economics Economics > Chairs > CESifo-Professorship for Business Cycle Analysis and Surveys (closed) |
Subjects: | 300 Social sciences > 330 Economics |
Language: | English |
Item ID: | 19988 |
Date Deposited: | 15. Apr 2014, 08:55 |
Last Modified: | 04. Nov 2020, 13:01 |