The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union

The Banking Union (BU) has given rise to the distinction between two types of banks, significant banks and less significant ones. This distinction may have produced asymmetries in the transmission of monetary policy, which has not been analysed by the previous literature. This paper tries to fill th...

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Autores: Sanfilippo Azofra, Sergio|||0000-0001-8941-2033, Torre Olmo, Begoña|||0000-0001-6081-9868, Cantero Saiz, María|||0000-0002-1442-3130
Tipo de recurso: artículo
Fecha de publicación:2023
País:España
Institución:Universidad de Cantabria (UC)
Repositorio:UCrea Repositorio Abierto de la Universidad de Cantabria
Idioma:inglés
OAI Identifier:oai:repositorio.unican.es:10902/30141
Acceso en línea:https://hdl.handle.net/10902/30141
Access Level:acceso abierto
Palabra clave:Monetary policy
Bank lending channel
Banking Union
Sovereign risk
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spelling The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking UnionSanfilippo Azofra, Sergio|||0000-0001-8941-2033Torre Olmo, Begoña|||0000-0001-6081-9868Cantero Saiz, María|||0000-0002-1442-3130Monetary policyBank lending channelBanking UnionSovereign riskThe Banking Union (BU) has given rise to the distinction between two types of banks, significant banks and less significant ones. This distinction may have produced asymmetries in the transmission of monetary policy, which has not been analysed by the previous literature. This paper tries to fill this gap in the literature by analysing the differences that monetary policy changes have on the loan supply of significant and less significant banks. Our sample consists of banks from the euro area and spans 2014 to 2020. Our empirical model, which is based on the System Generalized Method of Moments (System-GMM) methodology, regress the loan supply growth of each bank on monetary policy and sovereign risk indicators, significant and less significant banks dummies, and a group of control variables. Our results show that, although the BU may have well contributed to a smoother transmission of the monetary policy through the bank lending channel, there are still differences in how monetary policy changes affect the loan supply of significant and less significant banks. The different behaviour of the bank lending channel is observed mainly in countries with low sovereign risk, where the bank lending channel is only effective reducing the loan supply of less significant banks. Our results indicate that greater banking integration is necessary in the euro area.ElsevierUniversidad de Cantabria20232023-01-01journal articlehttp://purl.org/coar/resource_type/c_6501NAhttp://purl.org/coar/version/c_be7fb7dd8ff6fe43info:eu-repo/semantics/articlehttps://hdl.handle.net/10902/30141Heliyon, 2023, 9(9), e19139reponame:UCrea Repositorio Abierto de la Universidad de Cantabriainstname:Universidad de Cantabria (UC)Inglésengopen accesshttp://purl.org/coar/access_right/c_abf2Attribution-NonCommercial-NoDerivatives 4.0 Internationalhttp://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccessoai:repositorio.unican.es:10902/301412026-06-02T12:39:31Z
dc.title.none.fl_str_mv The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union
title The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union
spellingShingle The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union
Sanfilippo Azofra, Sergio|||0000-0001-8941-2033
Monetary policy
Bank lending channel
Banking Union
Sovereign risk
title_short The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union
title_full The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union
title_fullStr The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union
title_full_unstemmed The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union
title_sort The Bank lending channel and sovereign risk: effects on significant and less significant banks after the implementation of the Banking Union
dc.creator.none.fl_str_mv Sanfilippo Azofra, Sergio|||0000-0001-8941-2033
Torre Olmo, Begoña|||0000-0001-6081-9868
Cantero Saiz, María|||0000-0002-1442-3130
author Sanfilippo Azofra, Sergio|||0000-0001-8941-2033
author_facet Sanfilippo Azofra, Sergio|||0000-0001-8941-2033
Torre Olmo, Begoña|||0000-0001-6081-9868
Cantero Saiz, María|||0000-0002-1442-3130
author_role author
author2 Torre Olmo, Begoña|||0000-0001-6081-9868
Cantero Saiz, María|||0000-0002-1442-3130
author2_role author
author
dc.contributor.none.fl_str_mv Universidad de Cantabria
dc.subject.none.fl_str_mv Monetary policy
Bank lending channel
Banking Union
Sovereign risk
topic Monetary policy
Bank lending channel
Banking Union
Sovereign risk
description The Banking Union (BU) has given rise to the distinction between two types of banks, significant banks and less significant ones. This distinction may have produced asymmetries in the transmission of monetary policy, which has not been analysed by the previous literature. This paper tries to fill this gap in the literature by analysing the differences that monetary policy changes have on the loan supply of significant and less significant banks. Our sample consists of banks from the euro area and spans 2014 to 2020. Our empirical model, which is based on the System Generalized Method of Moments (System-GMM) methodology, regress the loan supply growth of each bank on monetary policy and sovereign risk indicators, significant and less significant banks dummies, and a group of control variables. Our results show that, although the BU may have well contributed to a smoother transmission of the monetary policy through the bank lending channel, there are still differences in how monetary policy changes affect the loan supply of significant and less significant banks. The different behaviour of the bank lending channel is observed mainly in countries with low sovereign risk, where the bank lending channel is only effective reducing the loan supply of less significant banks. Our results indicate that greater banking integration is necessary in the euro area.
publishDate 2023
dc.date.none.fl_str_mv 2023
2023-01-01
dc.type.none.fl_str_mv journal article
http://purl.org/coar/resource_type/c_6501
NA
http://purl.org/coar/version/c_be7fb7dd8ff6fe43
dc.type.openaire.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://hdl.handle.net/10902/30141
url https://hdl.handle.net/10902/30141
dc.language.none.fl_str_mv Inglés
eng
language_invalid_str_mv Inglés
language eng
dc.rights.none.fl_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/
dc.rights.openaire.fl_str_mv info:eu-repo/semantics/openAccess
rights_invalid_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/
eu_rights_str_mv openAccess
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv Heliyon, 2023, 9(9), e19139
reponame:UCrea Repositorio Abierto de la Universidad de Cantabria
instname:Universidad de Cantabria (UC)
instname_str Universidad de Cantabria (UC)
reponame_str UCrea Repositorio Abierto de la Universidad de Cantabria
collection UCrea Repositorio Abierto de la Universidad de Cantabria
repository.name.fl_str_mv
repository.mail.fl_str_mv
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