Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/213493
Authors: 
Acharya, Viral V.
Imbierowicz, Björn
Steffen, Sascha
Teichmann, Daniel
Year of Publication: 
2019
Series/Report no.: 
Bundesbank Discussion Paper No. 48/2019
Abstract: 
We investigate the transmission of central bank liquidity to bank deposits and loan spreads in Europe over the period from January 2006 to June 2010. We find evidence consistent with an impaired transmission channel due to bank risk. Central bank liquidity does not translate into lower loan spreads for high-risk banks for maturities beyond one year, even as it lowers deposit spreads for both high-risk and low-risk banks. This adversely affects the balance sheets of highrisk bank borrowers, leading to lower payouts, capital expenditures and employment. Overall, our results suggest that banks' capital constraints at the time of an easing of monetary policy pose a challenge to the effectiveness of the bank-lending channel and the central bank's lender-of- last-resort function.
Subjects: 
Central bank liquidity
Monetary policy transmission
Corporate deposits
Financial crisis
Lender of last resort
Loans
Real effects
JEL: 
E43
E58
G01
G21
ISBN: 
978-3-95729-657-3
Document Type: 
Working Paper

Files in This Item:
File
Size





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