25 Years IWH

Helge Littke

Helge Littke
Current Position

since 9/14

Economist in the Department of Financial Markets

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

Research Interests

  • central bank communication and interaction with financial markets

Helge Littke joined the Department of Financial Markets as a PhD student in September 2014. His research focuses on central bank communication and interaction with financial markets.

Helge Littke received his bachelor's and master's degree from University of Osnabrueck.

Your contact

Helge Littke
Helge Littke
Mitglied - Department Financial Markets
Send Message +49 345 7753-705

Publications

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Central Bank Transparency and Cross-border Banking

Stefan Eichler Helge Littke Lena Tonzer

in: Journal of International Money and Finance, No. 6, 2017

Abstract

We analyze the effect of central bank transparency on cross-border bank activities. Based on a panel gravity model for cross-border bank claims for 21 home and 47 destination countries from 1998 to 2010, we find strong empirical evidence that a rise in central bank transparency in the destination country, on average, increases cross-border claims. Using interaction models, we find that the positive effect of central bank transparency on cross-border claims is only significant if the central bank is politically independent and operates in a stable economic environment. Central bank transparency and credibility are thus considered complements by banks investing abroad.

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Working Papers

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Channeling the Iron Ore Super-cycle: The Role of Regional Bank Branch Networks in Emerging Markets

Helge Littke

in: IWH Discussion Papers, No. 11, 2018

Abstract

The role of the financial system to absorb and to intermediate commodity boom induced windfall gains efficiently presents one of the most pressing issues for developing economies. Using an exogenous increase in iron ore prices in March 2005, I analyse the role of regional bank branch networks in Brazil in reallocating capital from affected to non-affected regions. For the period from March 2004 to March 2006, I find that branches directly exposed to this shock by their geographical location experience an increase in deposit growth in the post-shock period relative to non-affected branches. Given that these deposits are not reinvested locally, I further show that branches located in the non-affected region increase lending growth depending on their indirect exposure to the booming regions via their branch network. Even tough, these results provide evidence against a Dutch Disease type crowding out of the non-iron ore sector, further evidence suggests that this capital reallocation is far from being optimal.

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Banks Fearing the Drought? Liquidity Hoarding as a Response to Idiosyncratic Interbank Funding Dry-ups

Helge Littke Matias Ossandon Busch

in: IWH Discussion Papers, No. 12, 2018

Abstract

Since the global financial crisis, economic literature has highlighted banks’ inclination to bolster up their liquid asset positions once the aggregate interbank funding market experiences a dry-up. To this regard, we show that liquidity hoarding and its detrimental effects on credit can also be triggered by idiosyncratic, i.e. bankspecific, interbank funding shocks with implications for monetary policy. Combining a unique data set of the Brazilian banking sector with a novel identification strategy enables us to overcome previous limitations for studying this phenomenon as a bankspecific event. This strategy further helps us to analyse how disruptions in the bank headquarters’ interbank market can lead to liquidity and lending adjustments at the regional bank branch level. From the perspective of the policy maker, understanding this market-to-market spillover effect is important as local bank branch markets are characterised by market concentration and relationship lending.

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Central Bank Transparency and the Volatility of Exchange Rates

Stefan Eichler Helge Littke

in: IWH Discussion Papers, No. 22, 2017

Abstract

We analyze the effect of monetary policy transparency on bilateral exchange rate volatility. We test the theoretical predictions of a stylized model using panel data for 62 currencies from 1998 to 2010. We find strong empirical evidence that an increase in the availability of information about monetary policy objectives decreases exchange rate volatility. Using interaction models, we find that this effect is more pronounced for countries with a lower flexibility of goods prices, a lower level of central bank conservatism, and a higher interest rate sensitivity of money demand.

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