so a weaker US dollar tends to increase global USD liquidity in the SVAR, one standard deviation of US dollar's appreciation leads to a fall in cross-border USD lending. it reaches its bottom after 6 months and then eventually recovers after 2.5 years if no new shocks arrive

Illya Gerasymchuk 2025-08-15 01:09

bank's leverage ratios improve due to collateral appreciation, thus allowing them to borrow more USD collateral here is the non-USD local currency, such as Yuan