Regional Inflation, Financial Integration and Dollarization

R. de Haas, M. Brown, V. Sokolov

Research output: Working paperDiscussion paperOther research output

49 Downloads (Pure)

Abstract

We exploit variation in consumer price inflation across 71 Russian regions to examine the relationship between the perceived stability of the domestic currency and financial dollarization. Our results show that regions with higher inflation experience an increase in the dollarization of household deposits and a decrease in the dollarization of loans to households and to firms in non-tradable sectors. The impact of inflation on credit dollarization is weaker in regions with less integrated banking markets. This suggests that the currency-portfolio choices of households and firms may be constrained by the asset-liability management of banks.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages36
Volume2015-012
Publication statusPublished - 26 Feb 2015

Publication series

NameEuropean Banking Center
Volume2015-002

Fingerprint

Financial integration
Inflation
Dollarization
Household
Currency
Loans
Deposits
Asset-liability management
Integrated
Banking
High inflation
Portfolio choice
Consumer prices
Credit

Keywords

  • Financial dollarization
  • Financial Integration
  • regional inflation

Cite this

de Haas, R., Brown, M., & Sokolov, V. (2015). Regional Inflation, Financial Integration and Dollarization. (European Banking Center; Vol. 2015-002). Tilburg: Finance.
de Haas, R. ; Brown, M. ; Sokolov, V. / Regional Inflation, Financial Integration and Dollarization. Tilburg : Finance, 2015. (European Banking Center).
@techreport{ef569549635c490cb44c2b9ca677ef78,
title = "Regional Inflation, Financial Integration and Dollarization",
abstract = "We exploit variation in consumer price inflation across 71 Russian regions to examine the relationship between the perceived stability of the domestic currency and financial dollarization. Our results show that regions with higher inflation experience an increase in the dollarization of household deposits and a decrease in the dollarization of loans to households and to firms in non-tradable sectors. The impact of inflation on credit dollarization is weaker in regions with less integrated banking markets. This suggests that the currency-portfolio choices of households and firms may be constrained by the asset-liability management of banks.",
keywords = "Financial dollarization, Financial Integration, regional inflation",
author = "{de Haas}, R. and M. Brown and V. Sokolov",
year = "2015",
month = "2",
day = "26",
language = "English",
volume = "2015-012",
series = "European Banking Center",
publisher = "Finance",
type = "WorkingPaper",
institution = "Finance",

}

de Haas, R, Brown, M & Sokolov, V 2015 'Regional Inflation, Financial Integration and Dollarization' European Banking Center, vol. 2015-002, Finance, Tilburg.

Regional Inflation, Financial Integration and Dollarization. / de Haas, R.; Brown, M.; Sokolov, V.

Tilburg : Finance, 2015. (European Banking Center; Vol. 2015-002).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Regional Inflation, Financial Integration and Dollarization

AU - de Haas, R.

AU - Brown, M.

AU - Sokolov, V.

PY - 2015/2/26

Y1 - 2015/2/26

N2 - We exploit variation in consumer price inflation across 71 Russian regions to examine the relationship between the perceived stability of the domestic currency and financial dollarization. Our results show that regions with higher inflation experience an increase in the dollarization of household deposits and a decrease in the dollarization of loans to households and to firms in non-tradable sectors. The impact of inflation on credit dollarization is weaker in regions with less integrated banking markets. This suggests that the currency-portfolio choices of households and firms may be constrained by the asset-liability management of banks.

AB - We exploit variation in consumer price inflation across 71 Russian regions to examine the relationship between the perceived stability of the domestic currency and financial dollarization. Our results show that regions with higher inflation experience an increase in the dollarization of household deposits and a decrease in the dollarization of loans to households and to firms in non-tradable sectors. The impact of inflation on credit dollarization is weaker in regions with less integrated banking markets. This suggests that the currency-portfolio choices of households and firms may be constrained by the asset-liability management of banks.

KW - Financial dollarization

KW - Financial Integration

KW - regional inflation

M3 - Discussion paper

VL - 2015-012

T3 - European Banking Center

BT - Regional Inflation, Financial Integration and Dollarization

PB - Finance

CY - Tilburg

ER -

de Haas R, Brown M, Sokolov V. Regional Inflation, Financial Integration and Dollarization. Tilburg: Finance. 2015 Feb 26. (European Banking Center).