Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/168339
Authors: 
Lewis, Vivien
Roth, Markus
Year of Publication: 
2017
Series/Report no.: 
Discussion Paper, Deutsche Bundesbank 23/2017
Abstract: 
The European Central Bank's asset purchase programs, while intended to stabilize the economy, may have unintended side effects on financial stability. This paper aims at gauging the effects on financial markets, the banking sector, and lending to non-financial firms. Using a structural vector autoregression analysis, we find both in the euro area and in Germany a positive effect on output, while prices do not respond significantly. Asset purchases reduce financial stress, but this beneficial effect is overturned in the medium run. In Germany, implicit firm default rates rise, while loan write-offs by banks decrease. This could point to an avoidance of balance sheet repair in the financial sector.
Subjects: 
asset purchase programs
balance sheet
monetary policy
central bank
shock identification
VAR
JEL: 
C32
E44
E52
E58
ISBN: 
978-3-95729-385-5
Document Type: 
Working Paper

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