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Spillover Effects of Global MonetaRy Shocks on Foreign Banks: Evidence from an Emerging Economy
Book chapter

Spillover Effects of Global MonetaRy Shocks on Foreign Banks: Evidence from an Emerging Economy

Bang Nam Jeon, Hosung Lim and Ji Wu
Emerging Market Finance: New Challenges and Opportunities, pp 113-127
28 Sep 2020

Abstract

Accounting and Finance
Abstract This chapter examines spillover effects of global monetary shocks on lending by foreign banks in an emerging country, South Korea. Foreign banks play a significant role by providing additional domestic credit and foreign currency liquidity and directing international capital flows via the banking sector. Using macroeconomic and banking data for the period of 2000Q1–2016Q2, the authors present evidence that foreign bank branches in Korea have responded in providing their foreign currency loans with one-quarter (three months) time lag to changes in monetary policies in their home countries (mainly, the United States and the Euro area). This short-run spillover effect of monetary policy shocks from the home countries to foreign banks in Korea seems consistent with the main findings from our bank-level data analysis. This chapter also discusses useful policy implications.

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UN Sustainable Development Goals (SDGs)

This publication has contributed to the advancement of the following goals:

#9 Industry, Innovation and Infrastructure
#10 Reduced Inequalities
#8 Decent Work and Economic Growth
#1 No Poverty

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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Business, Finance
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