Cross-Border Bank Flows and Monetary Policy

Abstract We analyze the impact of monetary policy on cross-border bank flows for a large sample countries over two decades. find evidence in favor risk-taking channel, as stance source is an important determinant flows. A relatively tighter prompts banks to reallocate their lending toward safer foreign counterparties. The reallocation credit more pronounced with lower-capitalized banks. Also, directed borrowers destinations, such advanced economies or investment-grade sovereign ratings.