In Lands of Foreign Currency Credit, Bank Lending Channels Run Through?

Steven Ongena, Ibolya Schindele and Dzsamila Vonnák ()

No 2017/6, MNB Working Papers from Magyar Nemzeti Bank (Central Bank of Hungary)

Abstract: We study the impact of monetary policy on the supply of bank credit when bank lending is also denominated in foreign currencies. Accessing a comprehensive supervisory dataset from Hungary, we find that the supply of bank credit in a foreign currency is less sensitive to changes in domestic monetary conditions than the equivalent supply in the domestic currency. Changes in foreign monetary conditions similarly affect bank lending more in the foreign than in the domestic currency. Hence when banks lend in multiple currencies the domestic bank lending channel is weakened and international bank lending channels become operational.

Keywords: Bank balance-sheet channel; monetary policy; foreign currency lending (search for similar items in EconPapers)
JEL-codes: E51 F3 G21 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2017
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

Downloads: (external link)
http://www.mnb.hu/letoltes/mnb-wp-2017-6-final.pdf (application/pdf)

Related works:
Journal Article: In lands of foreign currency credit, bank lending channels run through? (2021)
Working Paper: In Lands of Foreign Currency Credit, Bank Lending Channels Run Through? (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mnb:wpaper:2017/6

Access Statistics for this paper

More papers in MNB Working Papers from Magyar Nemzeti Bank (Central Bank of Hungary) Contact information at EDIRC.
Bibliographic data for series maintained by Lorant Kaszab ( this e-mail address is bad, please contact ).