Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315964 
Year of Publication: 
2025
Series/Report no.: 
Staff Reports No. 1149
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
The period after the Global Financial Crisis (GFC) was characterized by a considerable risk migration within global liquidity flows, away from cross-border bank lending towards international bond issuance. We show that the post-GFC shifts in the risk sensitivities of global liquidity flows are related to the tightness of the balance sheet (capital and leverage) constraints faced by international (bank and nonbank) lenders and to the migration of borrowers across funding sources. We document that the risk sensitivity of global liquidity flows is higher when funding is provided by financial intermediaries that are facing greater balance sheet constraints. We also provide evidence that the post-GFC migration of borrowers from cross-border loans to international debt securities was associated with a decline in the risk sensitivity of global liquidity flows to EME borrowers.
Subjects: 
global liquidity
international bank lending
international bond flows
emerging markets
advanced economies
JEL: 
G10
F34
G21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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