Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201714 
Year of Publication: 
2019
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 26/2019
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We study the implications of the Eurosystem's expanded Asset Purchase Programme (APP) for the bank lending business of euro area banks with euro area non-financial corporations (NFCs) using microeconometric matching techniques. Based on confidential bank-level data on quantitative balance sheet items and interest rates as well as on qualitative survey responses to the Eurosystem's Bank Lending Survey, we identify the exposure of banks to the APP and corresponding effects on loan growth. We find that the APP was effective in stimulating the lending activity with NFCs for a subset of relatively sound banks. At the same time, our results show that there is a non-negligible number of banks with less healthy balance sheets which could not transfer the APP stimulus into more lending. Instead, such banks appear to have used the APP stimulus for consolidating their balance sheets, thereby also reducing their lending business with NFCs. This confirms the importance of accounting for the large degree of heterogeneity in the euro area banking sector in analyses of the effectiveness of monetary policy measures.
Subjects: 
lending to non-financial corporations
bank-level data
bank heterogeneity
unconventional monetary policy
treatment effects
regression-adjusted matching
JEL: 
E52
G21
C21
ISBN: 
978-3-95729-606-1
Document Type: 
Working Paper

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