Template-Type: ReDIF-Paper 1.0

Author-Name: Steven Ongena 
Author-X-Name-First: Steven 
Author-X-Name-Last: Ongena
Author-Email: 
Author-Workplace-Name: University of Lousanne

Author-Name: Ibolya Schindele  
Author-X-Name-First: Ibolya
Author-X-Name-Last: Schindele 
Author-Email: ischindele@gmail.com
Author-Workplace-Name: Magyar Nemzeti Bank (Central Bank of Hungary)

Author-Name: Dzsamila Vonnák  
Author-X-Name-First: Dzsamila
Author-X-Name-Last: Vonnák 
Author-Email: 
Author-Workplace-Name: Magyar Nemzeti Bank (Central Bank of Hungary)





Title: In Lands of Foreign Currency Credit, Bank Lending Channels Run Through?


Abstract: We study the impact of monetary policy on the supply of bank credit when bank lending is also denominated in foreign currencies. Accessing a comprehensive supervisory dataset from Hungary, we find that the supply of bank credit in a foreign currency is less sensitive to changes in domestic monetary conditions than the equivalent supply in the domestic currency. Changes in foreign monetary conditions similarly affect bank lending more in the foreign than in the domestic currency. Hence when banks lend in multiple currencies the domestic bank lending channel is weakened and international bank lending channels become operational.

Length: 45 pages
Creation-Date: 2017
File-URL: http://www.mnb.hu/letoltes/mnb-wp-2017-6-final.pdf
File-Format: Application/pdf

Number: 2017/6
Classification-JEL: E51, F3, G21
Keywords: Bank balance-sheet channel, monetary policy, foreign currency lending
Handle: RePEc:mnb:wpaper:2017/6