Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201692 
Year of Publication: 
2018
Series/Report no.: 
Graduate Institute of International and Development Studies Working Paper No. HEIDWP09-2018
Publisher: 
Graduate Institute of International and Development Studies, Geneva
Abstract: 
The literature on drivers of capital flows stresses the prominent role of global financial factors. Recent empirical work, however, highlights how this role varies across countries and time, and this heterogeneity is not well understood. We revisit this question by focusing on financial intermediaries' funding flows in different currencies. A portfolio model shows that the sign and magnitude of the response of foreign currency funding flows to global risk factors depend on the financial intermediary's pre-existing currency exposure. Analysis of data on European banks' aggregate balance sheets lends support to the model predictions, especially in countries outside the euro area.
Subjects: 
Currency mismatch
capital flows
push factors
spillovers
cross-border transmission of shocks
European bank balance sheets
JEL: 
F32
F34
F36
Document Type: 
Working Paper

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