IMF Economic Review

, Volume 63, Issue 3, pp 542–567 | Cite as

International Banking and Liquidity Risk Transmission: Evidence from Ireland

  • Mary Everett
  • Jane Kelly
  • Fergal Mccann


The increased international expansion of Irish banks, combined with entry into the domestic market by a number of foreign competitors makes Ireland a pertinent country for studying the international transmission of liquidity risk. Using bank-level panel data and novel data on access to central bank liquidity and Exceptional Liquidity Assistance, regression analysis confirms a risk-absorbing effect, whereby official liquidity helped mitigate the effect of liquidity risk on domestic lending by larger Irish banks. Regression analysis also confirms that a larger net borrowing position vis-à-vis foreign affiliates insulates the effect of liquidity risk on domestic lending, suggesting that banks’ internal capital markets can provide a counterweight to systemic risks.

JEL Classifications

E44 F36 G32 

Supplementary material

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Supplementary material, approximately 3315 KB.


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Copyright information

© International Monetary Fund 2015

Authors and Affiliations

  • Mary Everett
  • Jane Kelly
  • Fergal Mccann

There are no affiliations available

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