Unconventional Monetary Policy, International Spillovers, and Systemic Risk

Project Start:02/2016
Researchers:Co-Pierre Georg, Tina Koziol, Jesper Riedler
Category: Financial Markets, Macro Finance
Funded by:Volkswagen Stiftung

This project studies the effect of Quantitative Easing on banks, particularly emerging market banks’ balance sheets and the real consequences thereof. The research team studies the effect of Quantitative Easing in industrialized countries on the balance sheet composition of banks in emerging countries, using South Africa as example. Four big banks in South Africa, three of which are owned by foreign banks, comprise over 90% of the banking system. The international integration makes South Africa a prime candidate for QE-related capital inflows. Quantifying its impact on systemic risk in an emerging country will yield new input to the debate on capital controls and macroprudential policy in emerging countries.