| By: |
Barbosa, Luciana (Banco de Portugal);
Bonfim, Diana (Banco de Portugal, Católica Lisbon School of Business & Economics);
Costa, Sónia (Banco de Portugal);
Everett, Mary (Central Bank of Ireland) |
| Abstract: |
This paper analyses cross-border spillovers of monetary policy by examining
two countries that were in the eye of the storm during the euro area sovereign
debt crisis, namely Ireland and Portugal. The research provides insight as to
how banking and sovereign stress aect the inward transmission of foreign
monetary policy to two economies that share many characteristics, but that
also have many distinct features. In particular, our research addresses the
question of whether a banking system in distress reacts more or less to
monetary policy changes in other major economies. The empirical analysis
indicates that international spillovers are present for US and UK monetary
policy for both Ireland and Portugal, but there is heterogeneity in the
transmission mechanisms by which they aect credit growth in the two economies. |
| Keywords: |
Cross-border banking, euro area sovereign crisis, unconventional monetary policy spillovers, credit supply. |
| JEL: |
G15 G21 |
| Date: |
2018–10 |
| URL: |
http://d.repec.org/n?u=RePEc:cbi:wpaper:10/rt/18&r=ifn |