The international bank lending channel of unconventional monetary policy

Arbeitspapier

We use a confidential euro area bank-level data set of close to 250 banks to assess outward and inward spillovers of unconventional monetary policies on bank lending. We find that euro area banks increase lending to the rest of the world in response to non-standard ECB monetary policy accommodation. We also find strong evidence that euro area banks increase lending to the domestic non-financial private sector in response to accommodative unconventional monetary policy measures in the US. Inward and outward spillovers are substantially stronger for euro area banks which are liquidity constrained and which rely more on internal capital markets. This suggests that bank-specific supply effects, stemming from banks' increased ability to lend following a central bank balance sheet expansion, are a major driver of mon- etary policy spillovers, providing strong support to the existence of an international bank lending channel that prevails at the effective lower bound.

Object Details

• ISBN: 978-92-899-3018-5
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 2109

Classification and Topics

• Classification: Wirtschaft ; Financial Markets and the Macroeconomy ; Monetary Policy ; Financial Crises
• Subject: international bank lending channel ; monetary policy ; quantitative easing ; cross-border spillovers

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gräb, Johannes ; Żochowski, Dawid
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2017

Further information

• DOI: doi:10.2866/576194
• Handle: http://hdl.handle.net/10419/179324
• Last update: 10.03.2025, 11:41 AM CET