Spillovers of the United Statess Unconventional Monetary Policy to Emerging Asia: The Bank Lending Channel

2016 ◽  
Author(s):  
Ying Xu ◽  
Hai Anh La
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Unconventional Monetary Policy ◽  
Bank Lending Channel ◽  
Lending Channel

Spillovers of the United States’ Unconventional Monetary Policy to Emerging Asia

2019 ◽  
pp. 118-145
Author(s):  
Ying Xu ◽  
Hai Anh La
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Bank Lending ◽  
The United States ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
Bank Lending Channel ◽  
Lending Channel ◽  
Cross Border ◽  
Syndicated Loan Market

This chapter assesses the spillover effects of the United States’ unconventional monetary policy on the Asian credit market. With a focus on cross-border bank lending, it employs firm-level loan data with regard to the syndicated loan market and measures the international bank lending channel through changes in United States dollar-denominated loans extended to Asian borrowers. It finds that the growth of dollar credit in Asia increased substantially in response to quantitative easing in the US financial market. The results of this study confirm the existence of the bank lending channel in Asia and emphasize the role of credit flows in transmitting financial conditions. The chapter also provides new evidence of cross-border liquidity spillover in the syndicated loan market. It finds that the overall spillover effect was large but differed significantly in Asia by types of borrowing firms, financing purposes, and loan terms at different stages of the quantitative easing programmes.

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