Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278670 
Year of Publication: 
2023
Series/Report no.: 
ECB Working Paper No. 2838
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We provide new evidence on how ECB's monetary policy decisions affect firms' bank loan expectations in the euro area. We use firm-level data derived from the ECB Survey on the Access to Finance of Enterprises for the period 2009 to 2022 and identify the impact of monetary policy by comparing the responses of firms interviewed shortly before and after monetary policy shocks. Our results are as follows. First, we find that firms' bank loan expectations react to monetary policy, with a contractionary shock leading to a downward revision of expectations. Second, we show that firms' response depends on the size and the sign of the shock, with only large and contractionary shocks having a significant negative effect on expectations. Third, we observe that the different components of central bank communication (i.e. the pure monetary policy shock and the central bank information shock) have different impacts on firms' beliefs. Fourth, we find that conventional and unconventional QE shocks have opposite effects on expectations, with the impact of QE policies mainly being driven by the central bank information component of the related announcements. Finally, we document that the response to monetary policy differs along firms' structural characteristics.
Subjects: 
Monetary policy
firms' expectations
survey data
JEL: 
C83
D22
D84
E58
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6123-3
Document Type: 
Working Paper

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