Financial institutions’ business models and the global transmission of monetary policy

Isabel Argimon, Clemens Bonner, Ricardo Correa*, Patty Duijm, Jon Frost, Jakob de Haan, Leo de Haan, Viktors Stebunovs

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review


Global financial institutions play an important role in channeling funds across countries and, therefore, transmitting monetary policy from one country to another. In this paper, we study whether such international transmission depends on financial institutions’ business models. In particular, we use Dutch, Spanish, and U.S. confidential supervisory data to test whether the transmission operates differently through banks, insurance companies, and pension funds. We find marked heterogeneity in the transmission of monetary policy across the three types of institutions, across the three banking systems, and across banks within each banking system. While insurance companies and pension funds do not transmit home-country monetary policy internationally, banks do, with the direction and strength of the transmission determined by their business models and balance sheet characteristics.

Original languageEnglish
Pages (from-to)99-117
Number of pages19
JournalJournal of International Money and Finance
Publication statusPublished - Feb 2019


  • Bank lending channel
  • Business models
  • Global financial institutions
  • Monetary policy transmission
  • Portfolio channel

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