Quantitative easing, portfolio rebalancing and credit growth: Micro evidence from Germany

Arbeitspapier

This paper sheds light on the effect of quantitative easing (QE) on bank lending. Using data on German banks for 2014-2016, I show that QE encourages banks to rebalance from securities to loans. For identification, I use bond redemptions as exogenous variation in banks' need to rebalance their portfolio and hence their exposure to QE. I find that more exposed banks increase their loan growth during QE relative to other banks. The growth differential is larger when bond market yields decrease stronger than loan market yields and for banks with equity constraints. These results imply that QE can affect bank lending even if banks do not hold assets purchased under the QE program, by increasing incentives to invest in higher-yield assets.

Angaben zum Objekt

• ISBN: 978-3-95729-467-8
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Bundesbank Discussion Paper ; No. 20/2018

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Money Supply; Credit; Money Multipliers ; Central Banks and Their Policies ; Portfolio Choice; Investment Decisions ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: quantitative easing ; bank lending ; proprietary trading ; monetary transmission

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Tischer, Johannes
• Ereignis: Veröffentlichung
• (wer): Deutsche Bundesbank
• (wo): Frankfurt a. M.
• (wann): 2018

Weitere Informationen

• Handle: http://hdl.handle.net/10419/180673
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ