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Spillover of funding dry-ups

Funding dry-ups spill over from one funding market to others across borders. When banks face a funding shortage in one market, they substitute into other sources of funding, intensifying competition in those markets. As a result, banks that are not directly affected by the original funding dry-up might nevertheless face a funding squeeze, as they are crowded out by the directly affected banks in the latter's search for alternative funding.

Andreas Barth recently published the paper titled Spillovers of funding dry-ups (joint with Inaki Aldasoro (BIS), Florian Balke (Strategy &) and Egemen Eren (BIS)) in the Journal of International Economics, the leading outlet for research in international economics.

Please find the article here:

Spillover of funding dry-ups