Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/175201 
Year of Publication: 
2016
Series/Report no.: 
Staff Report No. 793
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
Domestic prudential regulation can have unintended effects across borders and may be less effective in an environment where banks operate globally. Using U.S. micro-banking data for the first quarter of 2000 through the third quarter of 2013, this study shows that some regulatory changes indeed spill over. First, a foreign country's tightening of limits on loan-to-value ratios and local currency reserve requirements increase lending growth in the United States through the U.S. branches and subsidiaries of foreign banks. Second, a foreign tightening of capital requirements shifts lending by U.S. global banks away from the country where the tightening occurs to the United States and to other countries. Third, tighter U.S. capital regulation reduces lending by large U.S. global banks to foreign residents.
Subjects: 
macroprudential policies
international banking
bank credit
spillovers
JEL: 
F42
F44
G15
G21
Document Type: 
Working Paper

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