BIS paper finds cross-border links between monetary and macro-pru policy

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Research published by the Bank for International Settlements finds “significant interactions” between the monetary policies of major currency issuers and macro-prudential policies overseas.

In the working paper, Előd Takáts and Judit Temesvary use a “novel” strategy to identify interactions, using monetary policy that is exogenous to macro-prudential actions to separate out the effects.

They note a change in US interest rates has an impact on US dollar-denominated lending by UK banks, even if

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