Co-authors: Carlos Burga, Jose E. Gutierrez
Affiliation: Banco de España
Date and time: Wednesday, July 15, 2026 14:30 (Santiago, GMT-04:00)
Location (Hybrid Seminar):

• Auditorio at the Central Bank of Chile, Morandé 115, second floor.
• Online meeting

Registration: seminarios@bcentral.cl

Abstract: We study whether and how domestic banking regulations propagate internationally through trade linkages. We develop a stylized framework in which exporters respond to a credit-driven contraction in import demand through two margins: attenuating the shock by extending trade credit to constrained importers and reallocating exports across destinations. We test these mechanisms exploiting a large and unexpected increase in loan-loss provisioning requirements imposed on Spanish banks in 2012. Combining bank-firm credit registry data, confidential firm-level trade transactions, and global bilateral trade flows, we show that the regulation reduced credit supply to importers and led to a contraction in Spanish imports, generating spillovers to trading partners. Consistent with the model, exporters in financially developed economies offset the shock, while exporters in less developed financial systems experienced larger declines, particularly when trade costs are high. Exporters of homogeneous products reallocate across markets, whereas differentiated products exhibit limited reallocation and larger export declines.