Via Roberto Sarfatti, 25,
20100 Milan, Italy
Institutional Affiliation: Bocconi University
NBER Working Papers and Publications
|June 2017||The Shifting Drivers of Global Liquidity|
with Stefan Avdjiev, Leonardo Gambacorta, Linda S. Goldberg: w23565
The post-crisis period has seen a considerable shift in the composition and drivers of international bank lending and international bond issuance, the two main components of global liquidity. The sensitivity of both types of flow to US monetary policy rose substantially in the immediate aftermath of the Global Financial Crisis, peaked around the time of the 2013 Fed “taper tantrum”, and then partially reverted towards pre-crisis levels. Conversely, the responsiveness of international bank lending to global risk conditions declined considerably post-crisis and became similar to that of international debt securities. The increased sensitivity of international bank flows to US monetary policy has been driven mainly by post-crisis changes in the behaviour of national lending banking systems, e...