Impact of United States Monetary Policy on The Financial Stability of the Oil-Exporting Countries

The spillover effects from the United States monetary policy coming through the global banks lending transmission channel may cause serious disturbances in the fi- nancial systems of other countries. This research employs the panel data analysis and proves that oil-exporting countries, which consume over 25 percent of foreign USD de- nominated banking loans, face stronger spillover effects than other economies. Global and local factors affecting the oil-exporters’ sensitivity to the centre economy shocks are determined. Based on the evidence of panel data analysis, dynamics linking US monetary policy, the global banking system and financial stability of oil-exporters are investigated. The key finding of this study reveals the pre-eminent role of the oil price in the mitigation of the spillover effects on the financial stability of the oil-exporting countries.