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Bank lending and exchange rate shocks | VOX, CEPR Policy Portal

Standard economic models typically ignore the role of the financial system in transmitting exchange rate changes to the real economy. This column uses German data to show that large banks with high net foreign currency asset exposure increase lending to export-intensive firms and – through interbank markets – to small banks without foreign currency asset exposure but with a
United States United Kingdom Europe Iletzki Federal Reserve Bank Real Effects Of Exchange Rate Depreciation Bank Foreign Currency Exposure
Source: voxeu.org

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