Capital Flows and the Risk-Taking Channel of Monetary Policy
46 Pages Posted: 5 Apr 2013 Last revised: 5 Apr 2023
There are 2 versions of this paper
Capital Flows and the Risk-Taking Channel of Monetary Policy
BIS Working Paper No. 400
Number of pages: 43
Posted: 12 Apr 2013
Last Revised: 10 May 2014
Downloads
149
Date Written: April 2013
Abstract
We study the dynamics linking monetary policy with bank leverage and show that adjustments in leverage act as the linchpin in the monetary transmission mechanism that works through fluctuations in risk-taking. Motivated by the evidence, we formulate a model of the "risk-taking channel" of monetary policy in the international context that rests on the feedback loop between increased leverage of global banks and capital flows amid currency appreciation for capital recipient economies.
Suggested Citation: Suggested Citation
Bruno, Valentina Giulia and Shin, Hyun Song, Capital Flows and the Risk-Taking Channel of Monetary Policy (April 2013). NBER Working Paper No. w18942, Available at SSRN: https://ssrn.com/abstract=2245450
Do you have negative results from your research you’d like to share?
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.