We examine the transmission of international monetary policy shocks through the bank-lending channel. Exploiting a panel of data on Australian Authorized Deposit-Taking Institutions (ADIs), we show that the supply of credit is vulnerable to an international pass-through of monetary policy by offshore central banks. Contingent on the lending product, commercial banks respond differently to conventional and unconventional monetary policies, with banks headquartered in Asia demonstrating the highest degree of lending elasticity. Household and non-financial corporate loans are the most susceptible channels to policy shocks, while higher-margin lending, non-core assets, and reservable liabilities are insensitive. Unconventional monetary policies have a muted effect compared to traditional measures.

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Keywords: Bank Lending; Credit Supply; Monetary Policy; Quantitative Easing