Work

Global Factors in Noncore Bank Funding and Exchange Rate Flexibility

Year: 2025

Type: article

Abstract: We show that fluctuations in the ratio of noncore to core funding in the banking systems of advanced economies are largely driven by three global factors of both real and financial natures, with country‐specific factors playing only a minor role. Exchange rate flexibility helps insulate the noncore to core ratio from such global factors. This insulation is stronger in periods away from global crises. Tighter prudential regulations appear to have a complementary effect to exchange rate insulation.

Source: Journal of money credit and banking

DOI: 10.1111/jmcb.70005

Authors: LUÍS A.V. CATÃO, JAN DITZEN, DANIEL MARCEL TE KAAT

Institutions: Université de Strasbourg, University of Birmingham

Language: English

Topic: Banking stability, regulation, efficiency

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,800

Funders: Nederlandse Organisatie voor Wetenschappelijk Onderzoek, Ministero dell’Istruzione, dell’Università e della Ricerca, Universidade Estadual do Ceará