Cross-border spillovers of monetary policy: what changes during a financial crisis?

Luciana Barbosa, Diana Bonfim, Sónia Costa, Mary Everett

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


This paper analyses cross-border spillovers of monetary policy by examining two countries that were in the eye of the storm during the euro area sovereign debt crisis, namely Ireland and Portugal. The research provides insight as to how banking and sovereign stress affect the inward transmission of foreign monetary policy to two economies that share many characteristics, but that also have many distinct features. In particular, our research addresses the question of whether a banking system in distress reacts more or less to monetary policy changes in other major economies. The empirical analysis indicates that international spillovers are present for US and UK monetary policy for both Ireland and Portugal, but there is heterogeneity in the transmission mechanisms by which they affect credit growth in the two economies.
Original languageEnglish
Pages (from-to)154-174
Number of pages21
JournalJournal of International Money and Finance
Publication statusPublished - Dec 2018


  • Credit supply
  • Cross-border banking
  • Euro area sovereign crisis
  • Unconventional monetary policy spillovers


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