International monetary spillovers in bank profitability and risk-taking

Authors

Evangelos Salachas, School of Business
Georgios P. Kouretas, Department of Business Administration, Athens University of Economics and Business
Nikiforos T. Laopodis, ALBA Graduate Business School; Roger Williams UniversityFollow

Document Type

Article

Publication Title

Oxford Economic Papers

Publication Date

10-1-2025

Abstract

This article explores the impact of monetary policy changes on bank profitability and risk-taking in developed countries and BRICS. Utilizing a comprehensive dataset including country- and bank-level data from the Eurozone, the USA, the UK, Japan, and the BRICS, we distinguish between domestic and international monetary policy effects. Our analysis reveals that a monetary policy tightening increases bank profitability and reduces bank risk-taking domestically. Furthermore, we find that central bank decisions in developed countries have notable spillover effects on bank profitability and risk-taking in BRICS banks. These international spillovers operate through an internal funding channel, wherein global parent banks exchange funds with their affiliates.

Volume

77

Issue

4

First Page

1148

Last Page

1174

DOI

10.1093/oep/gpaf018

Recommended Citation

Salachas, E., Kouretas, G., & Laopodis, N. (2025). International monetary spillovers in bank profitability and risk-taking. Oxford Economic Papers, 77 (4), 1148-1174. https://doi.org/10.1093/oep/gpaf018

ISSN

00307653

E-ISSN

14643812