Essays on International Spillovers
International spillovers have become a hot topic of research in the past decade as economists saw how the monetary policies of large important countries spread across the world. My dissertation explores the impact of international spillovers adding to the literature on the transmission of domestic policy rates across borders, the effects of global conditions on domestic credit markets, and the regional expansion of banking institutions in the post-2008 period. In my first chapter, I analyze international monetary policy spillovers given higher degrees of interconnectedness to global financial markets. I do so by constructing an index that directly measures countries' interconnectedness using network analysis. The study allows me to show how monetary policy spillovers occur for emerging market economies. The findings give evidence that interconnectedness has played a factor in the co-movement of policy interest rates seen across the world. In my second chapter, I look for evidence of whether the Global Financial Cycle affects private sector loan prices in Colombia, a small open emerging market economy. I also distinguish between consumer and commercial credit, which allows me to explore each sector separately. My study addresses the heterogeneity within bank pricing behavior given global financial conditions—a new contribution to the literature. For my third chapter, I explore how Colombian banks expanded their assets by purchasing several Central and South American banks. I ask whether Colombian financial groups' acquisitions were funded by local or international capital. The study shows that Colombian banks accessed international financial markets to acquire operations of various global banks. At the same time, banks also used the domestic market to help fund their purchases but less consistently than international funding. The findings in this study reveal how Colombian banks became important regional players in Central America during a period of global bank retrenchment.
Payan, Carlos David, "Essays on International Spillovers" (2021). ETD Collection for Fordham University. AAI28540881.