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 do not increase their lending to non-financial firms, but—through interbank markets—to small banks...

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 do not increase their lending to non-financial firms, but—through interbank markets—to small banks...