The international transmission of monetary policy: Financial linkages and domestic policy responses (2016-17)
This project of the IBRN investigates the impact of conventional and unconventional monetary policy actions on (domestic and international) bank lending, using each country team’s individual bank-level data set. Country teams provide evidence from the point of view of the base country and from the recipient country. In this sense, the project will examine outward and inward transmission. Researchers focus on the period from 2000 through 2015, capturing a number of distinct monetary policy regimes.
Cross-Border Prudential Policy Spillovers: How Much? How Important? (2014-16)
The IBRN’s second research topic explores the changing scale, type, and location of banking activity stemming from shifts in micro- and macroprudential regulatory policy. The initiative considers how bank lending responds to prudential policies implemented in home and foreign markets. Researchers examine evidence on the inward transmission of policy changes to the domestic economy as well as outward spillovers to foreign economies.
International Banking and Liquidity Risk Transmission: Lessons from across Countries (2013)
Activities of international banks have been at the core of discussions on the causes and effects of the international financial crisis. Yet we know little about the actual magnitudes of and mechanisms of liquidity shocks transmitted through international banks, including the reasons for heterogeneity in transmission. The IBRN’s first joint research initiative is based on empirical studies conducted in eleven countries to explore liquidity risk transmission.
Comparative and comparable research across countries require equivalency in data. Projects of the IBRN have their starting point with regulatory, bank-level data that are available in central banks or other supervisory agencies. Often, additional data on policy measures are needed in order to obtain comparable results. In the course of their work, IBRN participants have been involved in significant efforts to integrate and standardize data from diverse sources and are committed to making the tools and results publicly available.
The instruments covered include different types of prudential regulations: capital requirements, concentration limits, interbank exposure limits, loan-to-value ratio limits, and changes in reserve requirements.
To construct this database, the IBRN and IMF collaboratively worked with regulatory sources in the individual countries, and extended and utilized the Global Macro Prudential Instruments (GMPI) survey which the IMF conducted in 2013. Stress tests, which may give incentives for banks to adjust their foreign exposures, are not covered in this project. Changes in reserve requirements are included since they are sometimes used explicitly by countries for prudential purposes, instead of as monetary policy instruments.
For an overview, see Eugenio Cerrutti, Ricardo Correa, Elisabetta Fiorentino, and Esther Segalla, “Changes in Prudential Policy Instruments—A New Cross-Country Database,” International Journal of Central Banking 11, no. 2 (2015).
Download the database
International Banking Library
The Halle Institute for Economic Research, together with scholars associated with the IBRN, launched the International Banking Library, which offers access to data sources, theoretical and empirical research on global banking themes, and information on regulatory initiatives.
Evaluation of Post-Crisis Financial Regulatory Reforms
The Financial Stability Board is leading an effort to assess whether core reforms implemented in G20 countries in response to the financial crisis are achieving their intended outcomes and to identify any regulatory gaps, remaining or emerging risks, and material unintended consequences. An April 2017 consulation paper
sets out the framework that will guide the evaluation.