Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338373 
Year of Publication: 
2026
Series/Report no.: 
CESifo Working Paper No. 12409
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
We study the spillovers of large-scale asset purchases (LSAPs) in the U.S. on financial intermediation in the euro area using bank-level supervisory data and high-frequency identified policy surprises. Our detailed panel data permit us to trace the impact of LSAPs through bank balance sheets. We find that the Federal Reserve affects credit provision in the euro area through a channel that we refer to as the "international bank capital channel" of unconventional monetary policy. In response to an LSAP shock that leads to a steepening of the U.S. Treasury yield curve, the Treasury positions of euro area banks shrink, capital ratios worsen, and banks that are less well capitalized contract their lending relative to banks that are better capitalized. Our results are consistent with an important role of revaluation effects, imperfect risk hedging, and credit as an adjustment margin for banks in the proximity of regulatory capital constraints.
Subjects: 
large-scale asset purchases
international spillovers
global financial cycle
credit channel of monetary policy
U.S. treasury yield curve
exchange rates
JEL: 
E52
F42
F44
G21
Document Type: 
Working Paper
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