A large share of dollar-denominated lending is done by non-U.S. banks, particularly European banks. We present a model in which such banks cut dollar lending more than euro lending in response to a shock to their credit quality. Because these banks rely on wholesale dollar funding, while raising...

Cover; Half-title; Title; Copyright; Contents; Contributors; Foreword; Acknowledgements; Abbreviations; Introduction; Part 1 Macroeconometric evidence on the transmission mechanism in the euro area; Part 2 Firms' investment and monetary policy: evidence from micro economic data; Part 3 The role of...

A large share of dollar-denominated lending is done by non-U.S. banks, particularly European banks. We present a model in which such banks cut dollar lending more than euro lending in response to a shock to their credit quality. Because these banks rely on wholesale dollar funding, while raising...