Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/206883 
Year of Publication: 
2019
Series/Report no.: 
ROME Discussion Paper Series No. 2019-07
Publisher: 
Research On Money in the Economy (ROME), s.l.
Abstract: 
The paper examines the bank lending activities of banks in a low interest rate environment. External financing of small- and medium-sized enterprises in the euro area primarily takes place via bank loans and not through capital markets. Based on the Bankscope database, bank balance sheet data is utilized. Control variables are included, such as for the system of banking regulation. The panel estimation includes 706 banks from 15 Euro area member states and is conducted for the period 2000 to 2015. All models show a significant positive impact of lower interest rates on net lending. In particular, the results do not indicate that credit is restricted if interest rates move towards the zero-lower bound.
Subjects: 
bank lending
banking regulation
monetary transmission mechanisms
low interest rate environment
JEL: 
E44
E51
E52
Document Type: 
Working Paper

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