Fed policy has had bigger impact on global liquidity since 2009
A 25bp rate cut causes a cross-border lending growth to rise of two percentage points, versus 0.8 before the crisis, researchers find
Global liquidity flows have become considerably more sensitive to US monetary policy since the first quarter of 2009, research published by the Federal Reserve Bank of New York shows.
US monetary policy as a changing driver of global liquidity by Stefan Avdjiev, Leonardo Gambacorta, Linda Goldberg and Stefano Schiaffi investigates how global debt and bond flows respond to monetary policy and other factors. It also explores whether those responses have changed since the global financial crisis.
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