Expansionary monetary policy and bank lending: the case of new Euro Area member states

Fisera, Boris; Kotlebová, Jana

doi:10.1504/ijmef.2020.109993

Cited by 5 publications

(2 citation statements)

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“…Balfoussia and Gibson (2016) analyzed the potential impacts of TLTROs using a VAR framework and concluded that these policies have the potential of generating positive economic activity in the Euro area, including the more vulnerable countries. Fisera and Kotlebova (2020) analyzed the impact of UMP policies on newer Euro area members (Lithuania, Estonia, Latvia, Slovakia, and Slovenia) and determined that these policies did not have any statistically significant effects on lending for this group of Euro area members. This is an interesting result because since the GDP of these countries grew at a faster pace than their Euro area counterparts, there could be an expectation of more investment and growth opportunities.…”

Section: Literaturementioning

confidence: 99%

Unconventional monetary policy in the Euro area: Impacts on loans, employment, and investment

Afonso,

Gomes Pereira

2023

Int. J Fin Econ

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Using a dataset of bank‐ and regional‐level data, we study the effectiveness and heterogeneity of the transmission mechanism of the ECB's large scale asset purchases (LSAPs) to the real economy. Our results indicate that banks more exposed to government debt securities had higher growth of loans and loans relative to total assets than less exposed banks after the asset purchase programme (APP), but not after the pandemic emergency purchase programme (PEPP). Furthermore, our results demonstrate that regions where banks are more exposed to government securities exhibit more favorable outcomes after the APP in GDP, fixed capital formation, unemployment, and compensation of employees than regions with less exposed banks, via the bank lending channel. We argue that banks' exposure to LSAPs targeted assets and their geographical location is an important factor determining the magnitude and heterogeneity of the portfolio rebalancing transmission mechanism to the real economy.

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Section: Literaturementioning

confidence: 99%

Unconventional monetary policy in the Euro area: Impacts on loans, employment, and investment

Afonso,

Gomes Pereira

2023

Int. J Fin Econ

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“…This study examines the impact of monetary policy on bank liquidity creation. There have been a growing number of studies showing the existence of the bank lending channel of monetary policy transmission in most advanced economies and some emerging markets (the good reviews on bank lending channel could be found in the works of Khan et al (2016), Yang and Shao (2016), Fisera and Kotlebova (2020), and Dang and Dang (2021)). As a much broader concept compared to bank lending, bank liquidity creation relates to loans, deposits, and even off-balance sheet items.…”

Section: Introductionmentioning

confidence: 99%

The bank liquidity creation channel of monetary policy transmission in a multiple-instrument environment

Dang¹

2022

IJMEF

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The study investigates the impact of monetary policy on bank liquidity creation, a much broader concept than bank lending. Using the annual financial data of Vietnamese commercial banks from 2008 to 2018, we show that an expansionary (contractionary) monetary policy tends to increase (decrease) bank liquidity creation. Our further analysis through monetary policy indicators ranging from lending rates to primary policy instruments, including policy rates and open market operations, provides strong evidence favouring the bank liquidity creation channel. Slightly differently, we do not have much confidence in the case of the foreign exchange reserves. Besides, we also confirm the existence of the bank lending channel, which differs from the bank liquidity creation channel in terms of the magnitude of transmission, from the perspective of a multiple monetary-policy-instrument environment.

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Bank opacity and stability in an emerging market

Dang

Huynh

2023

IJOEM

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PurposeThe paper analyzes the impact of bank opacity on financial stability in an emerging economy.Design/methodology/approachBased on a unique dataset of 31 Vietnamese commercial banks from 2007 to 2019, the paper captures earnings opacity via discretionary loan loss provisions and reflects individual bank stability through the accounting-based Z-score index and its disaggregate components. The least squares dummy variable corrected (LSDVC) approach is employed for empirical analysis.FindingsIn contradiction to most studies on developed economies, earnings management improves bank financial stability in Vietnam. Earnings management is more important for the financial stability of smaller banks. Further, the effect of financial information disclosure on bank stability is strengthened by unfavorable macroeconomic conditions, particularly economic downturns, the global financial crisis and uncertain times in banking.Originality/valueThis is the first study to shed light on how bank opacity influences bank financial stability in an emerging market. The evidence with the conditioning roles of bank size and macroeconomic factors, such as uncertainty in banking, is entirely novel in the related literature. Additionally, the paper contributes to a growing body of banking literature by using the LSDVC estimator to examine the association between bank opacity and bank stability.

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Expansionary monetary policy and bank lending: the case of new Euro Area member states

Cited by 5 publications

References 0 publications

Unconventional monetary policy in the Euro area: Impacts on loans, employment, and investment

Unconventional monetary policy in the Euro area: Impacts on loans, employment, and investment

The bank liquidity creation channel of monetary policy transmission in a multiple-instrument environment

Bank opacity and stability in an emerging market

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