Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174468
Authors: 
Morais, Bernardo
Peydró, José-Luis
Roldán-Peña, Jessica
Ruiz, Claudia
Year of Publication: 
2017
Series/Report no.: 
Working Papers 2017-15
Abstract: 
We identify the international credit channel of monetary policy by analyzing the universe of corporate loans in Mexico matched with firm and bank data, and by exploiting foreign monetary policy shocks in a country with a large presence of European and U.S. banks. The robust results show that a softening of foreign monetary policy increases the supply of credit of foreign banks to Mexican firms. Each regional policy shock mainly affects supply via their respective banks, in turn implying strong real effects, with lower elasticities from QE. The impact of low foreign monetary policy rates and expansive QE is stronger on local borrowers with higher ex-ante loan rates -reach-for-yield- and with higher ex-post loan defaults, thus suggesting an international risk-taking channel of monetary policy. All in all, the results suggest spillovers of core-countries' monetary policies on emerging markets, both in the foreign monetary softening and tightening part.
Subjects: 
Monetary policy
financial globalization
quantitative easing (QE)
credit supply
risk-taking
foreign banks
JEL: 
E52
E58
G01
G21
G28
Document Type: 
Working Paper
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