Dollar funding drives global house price movements – BIS paper
Non-US banks often depend heavily on dollar funding to issue mortgages, authors show
Dollar funding conditions can drive changes in house prices across the globe, shedding new light on the role the US dollar plays in driving the global financial cycle, research shows.
The working paper, published by the Bank for International Settlements, highlights what the authors call a “new international spillover channel”. Torsten Ehlers, Mathias Hoffmann and Alexander Raabe construct a measure of dollar dependence based on BIS data, and show that house prices move together more where two
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