Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278346 
Year of Publication: 
2023
Series/Report no.: 
ECB Working Paper No. 2775
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We study the effects of negative interest rate policies (NIRP) on the transmission of monetary policy through cross-border lending. Using bank-level data from international financial centres - the United Kingdom, Hong Kong and Ireland - we examine how NIRP in the economies where banks have their headquarters influences cross-border lending from financial-centre affiliates. We find that NIRP impairs the bank-lending channel for cross-border lending to non-bank sectors, especially for those banks that have only a weak deposit base in IFCs - and are thus relatively more exposed to NIRP in their headquarters. Using euro-area data, including bank-level data from France, we find that NIRP does not influence overall cross-border lending from banks' headquarters' economies, but NIRP does impair lending to financial sectors based in IFCs. This impairment is stronger for banks with a large deposit base in headquarter economies exposed to NIRP.
Subjects: 
Bank lending
Cross-border lending
International financial centres
Monetary policy
Negative interest rates
Risk-taking
JEL: 
E52
F34
F36
F42
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-5517-1
Document Type: 
Working Paper

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