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Working Paper
The Currency Dimension of the Bank Lending Channel in International Monetary Transmission
We investigate how the use of a currency transmits monetary policy shocks in the global banking system. We use newly available unique data on the bilateral cross-border lending flows of 27 BIS-reporting lending banking systems to over 50 borrowing countries, broken down by currency denomination (USD, EUR and JPY). We have three main findings. First, monetary shocks in a currency significantly affect cross-border lending flows in that currency, even when neither the lending banking system nor the borrowing country uses that currency as their own. Second, this transmission works mainly through ...
Working Paper
Dollarization Waves: New Evidence from a Comprehensive International Bond Database
We investigate how the U.S. dollar's prominence in the denomination of international debt securities has evolved in recent decades, using a comprehensive global dataset with far more extensive coverage than datasets used in prior literature. We find no monotonic dollarization or de-dollarization trend; instead, the dollar's share exhibits a wavelike pattern. We document three dollarization waves since the 1960s. The last wave, following the global financial crisis, lifted the dollar's share nearly back to its level at the euro's launch in 2000. Our findings are robust to composition and ...