Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/60919
Authors: 
Cetorelli, Nicola
Goldberg, Linda S.
Year of Publication: 
2008
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 333
Abstract: 
The globalization of banking in the United States is influencing the monetary transmission mechanism both domestically and in foreign markets. Using quarterly information from all U.S. banks filing call reports between 1980 and 2006, we show that globalized banks activate internal capital markets with their overseas affiliates to insulate themselves partially from changes in domestic liquidity conditions. The existence of these internal capital markets directly contributes to an international propagation of domestic liquidity shocks to lending by affiliated banks abroad. While these results imply a substantially more active lending channel than documented in Kashyap and Stein (2000), they also imply that the lending channel within the United States is declining in strength as banking becomes more globalized and monetary transmission abroad likewise increases in strength.
Subjects: 
Lending channel
bank
global
liquidity
transmission
internal capital markets
JEL: 
E44
F36
G32
Document Type: 
Working Paper

Files in This Item:
File
Size
231.73 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.