Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/293975 
Year of Publication: 
2024
Series/Report no.: 
ECONtribute Discussion Paper No. 292
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
We study the interaction of expansionary rate-based monetary policy and quantitative easing, despite their concurrent implementation, by exploiting heterogeneous banks and the introduction of negative monetary-policy rates in a fragmented euro area. Quantitative easing increases credit supply less, translating into weaker employment growth, when banks' funding costs do not decrease. Using administrative data from Germany, we uncover that among banks selling their securities, central-bank reserves remain disproportionately with high-deposit banks that are constrained due to sticky customer deposits at the zero lower bound. Affected German banks lend relatively less to ffrms while increasing their interbank exposure in the euro area.
Subjects: 
Negative Interest Rates
Quantitative Easing
Unconventional Monetary Policy
Bank Lending Channel
JEL: 
E44
E52
E58
E63
F45
G20
G21
Document Type: 
Working Paper

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