Veranstaltung
25
Apr 2022

14:15 - 15:45
IWH Research Seminar

The Real Effects of Exchange Rate Depreciation: The Role of Bank Loan Supply

Using matched bank-firm-level data and the 2014 depreciation of the euro, we show that exchange rate depreciations can lead to higher loan supply.

Wer
Thorsten Beck (Florence School of Banking and Finance and European University Institute)
Wo
IWH, conference room and via Zoom
Thorsten Beck (Florence School of Banking and Finance and European University Institute)

Zur Person

Thorsten Beck is Director of the Florence School of Banking and Finance and Professor of Financial Stability at the European University Institute.

Using matched bank-firm-level data and the 2014 depreciation of the euro, we show that exchange rate depreciations can lead to higher loan supply. Large banks with high net dollar exposure increase lending to export-intensive firms and through interbank markets to small banks without foreign-currency asset exposure but with a high share of exporting firms in their portfolio. We also find that German regions with such small banks experience higher output growth following the depreciation. These findings show the importance of banks’ balance sheet structure and interbank markets in transmitting exchange rate shocks to the real economy.


To join the lecture via ZOOM, please contact Melina Ludolph.

 

 

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