Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246184 
Year of Publication: 
2021
Series/Report no.: 
ECB Working Paper No. 2607
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We provide evidence that the strength of the bank lending channel varies considerably across three major events in the European sovereign debt crisis { the Greek debt restructuring (PSI), outright monetary transactions (OMT), and quantitative easing (QE). We study how lending responds to each shock using detailed bank, firm, and household data from Portugal, a country that was directly exposed to the three events. While the price of sovereign debt securities increased in all three events, banks reduced sovereign debt holdings and realized accumulated capital gains only after QE. As a result, lending to final borrowers reacted more strongly to QE than to the PSI or OMT events. Our results suggest that asset purchases were more effective than signalling events at stimulating the bank lending channel.
Subjects: 
asset purchases
bank lending channel
OMT
PSI
QE
JEL: 
E52
E58
G18
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4860-9
Document Type: 
Working Paper

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