Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/117341
Authors: 
Cycon, Lisa
Koetter, Michael
Year of Publication: 
2015
Series/Report no.: 
IWH Discussion Papers 9/2015
Abstract: 
With a unique loan portfolio maintained by a top-20 universal bank in Germany, this study tests whether unconventional monetary policy by the European Central Bank (ECB) reduced corporate borrowing costs. We decompose corporate lending rates into refinancing costs, as determined by money markets, and markups that the bank is able to charge its customers in regional markets. This decomposition reveals how banks transmit monetary policy within their organizations. To identify policy effects on loan rate components, we exploit the co-existence of eurozone-wide security purchase programs and regional fiscal policies at the district level. ECB purchase programs reduced refinancing costs significantly, even in an economy not specifically targeted for sovereign debt stress relief, but not loan rates themselves. However, asset purchases mitigated those loan price hikes due to additional credit demand stimulated by regional tax policy and enabled the bank to realize larger economic margins.
Subjects: 
unconventional monetary policy
asset purchase programs
ECB
interest rate channel
internal capital markets
JEL: 
G01
G21
E42
E43
E52
Document Type: 
Working Paper

Files in This Item:
File
Size
965.61 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.