Arbeitspapier
The effects of government bond purchases on leverage constraints of banks and non-financial firms
This paper investigates how government bond purchases affect leverage-constrained banks and non-financial firms by utilising a stochastic general equilibrium model. My results indicate that government bond purchases not only reduce non-financial firms' borrowing costs, amplified through a reduction in expected defaults, but also lower banks' profit margins. In an economy in which loans priced at par dominate in banks' balance sheets - as a reflection of the euro area's structure - the leverage constraint of non-financial firms is relaxed while that of banks tightens. I show that the leverage constraint in the non-financial sector plays an essential role in transmitting the impulses of government bond purchases to the real economy.
- ISBN
-
978-3-95729-304-6
- Sprache
-
Englisch
- Erschienen in
-
Series: Bundesbank Discussion Paper ; No. 38/2016
- Klassifikation
-
Wirtschaft
Financial Markets and the Macroeconomy
Central Banks and Their Policies
Policy Objectives; Policy Designs and Consistency; Policy Coordination
- Thema
-
DSGE Model
Financial Frictions
Banking Sector
Portfolio Rebalancing Channel
Government Bond Purchases
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Kühl, Michael
- Ereignis
-
Veröffentlichung
- (wer)
-
Deutsche Bundesbank
- (wo)
-
Frankfurt a. M.
- (wann)
-
2016
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Kühl, Michael
- Deutsche Bundesbank
Entstanden
- 2016
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