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Working Paper
Gender and Professional Networks on Bank Boards
Women are underrepresented on bank boards. Using a newly compiled dataset of bank board membership over the 1999-2018 period, we find that within-board professional networks are extensive, but female board members are significantly less connected than male directors, both in number and length of connections. We also find that professional networks play an important role in determining the appointment of bank board directors. Connections also positively impact compensation for female directors, especially connections to other women. These results suggest that there are differences in the ...
Working Paper
Can Macroprudential Measures Make Cross-Border Lending More Resilient? Lessons from the Taper Tantrum
We study the effect of macroprudential measures on cross-border lending during the taper tantrum, which saw a strong slowdown of cross-border bank lending to some jurisdictions. We use a novel dataset combining the BIS Stage 1 enhanced banking statistics on bilateral cross-border lending flows with the IBRN?s macroprudential database. Our results suggest that macroprudential measures implemented in borrowers? host countries prior to the taper tantrum significantly reduced the negative effect of the tantrum on cross-border lending growth. The shock-mitigating effect of host country ...
Discussion Paper
Gender Diversity on Bank Board of Directors and Performance
Many papers have studied the effects of boards' gender composition on firm performance and a few have studied it in the banking industry specifically. In this Note, we study this issue using a newly compiled annual dataset on bank boards and financial performance.
Working Paper
A Global Lending Channel Unplugged? Does U.S. Monetary Policy Affect Cross-border and Affiliate Lending by Global U.S. Banks?
We examine how U.S. monetary policy affects the international activities of U.S. Banks. We access a rarely studied U.S. bank-level regulatory dataset to assess at a quarterly frequency how changes in the U.S. Federal funds rate (before the crisis) and quantitative easing (after the onset of the crisis) affects changes in cross-border claims by U.S. banks across countries, maturities and sectors, and also affects changes in claims by their foreign affiliates. We find robust evidence consistent with the existence of a potent global bank lending channel. In response to changes in U.S. monetary ...
Discussion Paper
Foreign banks' asset reallocation in response to the introduction of the Intermediate Holding Company rule of 2016
The implementation of the 2016 intermediate holding company (IHC) rule required foreign banking organizations (FBOs) operating with more than $50 billion total global consolidated assets and with $50 billion or more in U.S. non-branch assets to consolidate their non-branch activities – including their U.S. subsidiaries and U.S. broker-dealers – into holding companies, to be supervised by the Federal Reserve.
Working Paper
How does the interaction of macroprudential and monetary policies affect cross-border bank lending?
We combine a rarely accessed BIS database on bilateral cross-border lending flows with cross-country data on macroprudential regulations. We study the interaction between the monetary policy of major international currency issuers (USD, EUR and JPY) and macroprudential policies enacted in source (home) lending banking systems. We find significant interactions. Tighter macroprudential policy in a home country mitigates the impact on lending of monetary policy of a currency issuer. For instance, macroprudential tightening in the UK mitigates the negative impact of US monetary tightening on ...
Working Paper
Domestic Lending and the Pandemic: How Does Banks' Exposure to Covid-19 Abroad Affect Their Lending in the United States?
We study how U.S. banks' exposure to the economic fallout due to governments' response to Covid-19 in foreign countries has affected their credit provision to borrowers in the United States. We combine a rarely accessed dataset on U.S. banks' cross-border exposure to borrowers in foreign countries with the most detailed regulatory ("credit registry") data that is available on their U.S.-based lending. We compare the change in the U.S. lending of banks that are more vs. less exposed to the pandemic abroad, during and after the onset of Covid-19 in 2020. We document strong spillover effects: ...
Working Paper
How Does the Strength of Monetary Policy Transmission Depend on Real Economic Activity?
We study the relationship between the strength of the bank credit channel (BCC) of monetary policy and real GDP growth in the United States using quarterly commercial bank level data between 1986 and 2008. We find that the BCC was significantly stronger during periods of low economic growth. Monetary policy is more effective through this channel in spurring economic activity during periods of low growth, rather than in cooling the economy when growth is high. Furthermore, we find that the BCC operated through a broader range of loan categories and banks than previously documented, ...
Working Paper
Domestic Lending and the Pandemic: How Does Banks' Exposure to Covid-19 Abroad Affect Their Lending in the United States?
Shortly after the onset of the pandemic, U.S. banks cut their term lending to businesses–but little is known about how much, and why, banks' choice to ration credit contributed to this contraction. Afforded by a unique combination of several highly granular bank regulatory datasets, we identify the role of banks' exposure to Covid-related restrictions abroad – a balance sheet "shock" that affects only banks' credit supply, but not their US borrowers' demand for loans. We find that US banks with higher foreign Covid exposure cut their lending to US firms, and tightened terms on such loans, ...
Working Paper
Gender and Social Networks on Bank Boards
We examine the effect of the social networks of bank directors on board gender diversity and compensation using a unique, newly compiled dataset over the 1999-2018 period. We find that within-board social networks are extensive, but there are significant differences in the size and gender composition of social networks of male vs female bank directors. We also find that samegender networks play an important role in determining the gender composition of bank boards. Finally, we show that those connected to male directors receive higher compensation, but we find no evidence that connections to ...