Date/Time Date(s) - 07/11/202511:00 am - 12:30 pm
Santiago Camara is an Assistant Professor of Economics at McGill University. His research focuses on international macroeconomics and finance, with a particular emphasis on monetary policy, global banks, and Emerging Market Economies. He studies how global financial shocks propagate across borders using a combination of high-frequency identification, panel time-series methods, and micro-level credit data. His work has been published in the Journal of International Economics and at the NBER Macroeconomics Annual.
He will present, “Global Banks’ Spillovers to Emerging Markets: Macro to Micro Transmission“.
Abstract
We study how shocks to global banks’ net worth spill over to Emerging Market Economies (EMEs) using a macro-to-micro approach. We identify exogenous shocks to global bank net worth from high-frequency stock-price reactions around earnings announcements for the largest international banks. Positive shocks trigger capital inflows toward EMEs, expanding domestic banks’ balance sheets and leading to an increase in bank lending. Using panel local projections across EMEs, we document that these shocks raise domestic credit and real activity. We then open the black box of transmission using bank-level balance sheet data and universe-level firm–bank loan observations from Uruguay’s credit registry. Banks with higher exposure to global funding expand lending more following positive global bank shocks. At the firm level, we find that firms with lower leverage respond more, consistent with a cost-of-capital channel dominating rather than a relaxation of borrowing constraints on highly indebted firms. The evidence highlights the importance of global bank balance sheets in driving cross-border capital flows and shaping credit conditions in EMEs.