International Spillovers and Local Credit Cycles
This paper studies the transmission of the Global Financial Cycle (GFC) to domestic credit market conditions in a large emerging market, Turkey, over 2003–13. We use administrative data covering the universe of corporate credit transactions matched to bank balance sheets to document four facts: (1) an easing in global financial conditions leads to lower borrowing costs and an increase in local lending; (2) domestic banks more exposed to international capital markets transmit the GFC locally; (3) the fall in local currency borrowing costs is larger than foreign currency borrowing costs due to the comovement of the uncovered interest rate parity (UIP) premium with the GFC over time; (4) data on posted collateral for new loan issuances show that collateral constraints do not relax during the boom phase of the GFC.
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Copy CitationJulian di Giovanni, Sebnem Kalemli-Ozcan, Mehmet Fatih Ulu, and Yusuf Soner Baskaya, "International Spillovers and Local Credit Cycles," NBER Working Paper 23149 (2017), https://doi.org/10.3386/w23149.Download Citation
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Published Versions
Julian di Giovanni & Şebnem Kalemli-Özcan & Mehmet Fatih Ulu & Yusuf Soner Baskaya, 2022. "International Spillovers and Local Credit Cycles," The Review of Economic Studies, vol 89(2), pages 733-773. citation courtesy of 
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