Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/269089 
Year of Publication: 
2022
Series/Report no.: 
ECB Working Paper No. 2682
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We assess whether central bank credit operations influence the size and composition of bank credit in a negative interest rate environment. We exploit confidential information from the newly established European credit registry to capture bank lending conditions and bank risk-taking. For identification, we use high-frequency reactions of bank bonds around the announcement of the April 2020 recalibration of the ECB's Targeted Longer-Term Refinancing Operations (TLTROs). We find that the credit easing measures had a strong positive effect on bank credit, even when controlling for possible confounding factors. The increase in lending was not accompanied by excessive risk-taking, especially for banks with low intermediation margin, that is, those that were poised to benefit the most from TLTROs' borrowing rates below the interest rates on central bank reserves.
Subjects: 
unconventional monetary policy
bank lending
risk-taking
dual rates
JEL: 
E51
E52
G01
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-5266-8
Document Type: 
Working Paper

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