This paper examines the transmission of U.S. monetary policy shocks to bank lending in 12 Latin American countries between 2000 and 2020. Using data from 118 banks, we find evidence of an international bank lending channel, even in countries with low direct exposure to U.S. banks. Crucially, the strength and direction of this transmission depend on the degree of financial dollarization. While U.S. tightening is, on average, associated with rising credit, in more dollarized economies it leads to slower loan growth. These findings underscore the vulnerability of dollarized banking systems and point to the need for strengthened local macroprudential and supervisory frameworks.
