Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/207607
Authors: 
Altavilla, Carlo
C. Andreeva, Desislava
Boucinha, Miguel
Holton, Sarah
Year of Publication: 
2019
Series/Report no.: 
ECB Occasional Paper 222
Abstract: 
As the euro area has a predominantly bank-based financial system, changes in the composition and strength of banks' balance sheets can have very sizeable implications for the transmission of monetary policy. This paper provides an overview of developments in banks' balance sheets, profitability and risk-bearing capacity and analyses their relevance for monetary policy. We show that, while the transmission of standard policy interest rate cuts to firms and households was diminished during the crisis, in a context of financial market stress and weak bank balance sheets, unconventional monetary policy measures have helped to restore monetary policy transmission and pass-through to interest rates. We also document the extent to which these non-standard measures were successful in stimulating lending and which bank business models were more strongly affected. Finally, we show that the estimated impact of recent monetary policy measures on bank profitability does not appear to be particularly strong when all the effects on the macroeconomy and asset quality are taken into account.
Subjects: 
monetary policy
interest rates
banks
credit
JEL: 
G21
G20
E52
E43
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3687-3
Document Type: 
Research Report

Files in This Item:
File
Size
509.84 kB





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