Monetary policy, macroprudential policy, and banking stability: evidence from the euro area

We analyze the impact on lending standards of monetary policy rates and macroprudential policy before the 2008 crisis, and of monetary rates and long-term public liquidity during the crisis. Exploiting the euro-area institutional setting for monetary and prudential policy and using the Bank Lending...

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Detalles Bibliográficos
Autores: Maddaloni, Angela, Peydró, José-Luis
Tipo de recurso: artículo
Estado:Versión publicada
Fecha de publicación:2013
País:España
Institución:Universitat Pompeu Fabra
Repositorio:Repositorio Digital de la UPF
OAI Identifier:oai:repositori.upf.edu:10230/44891
Acceso en línea:http://hdl.handle.net/10230/44891
Access Level:acceso abierto
Palabra clave:Política monetària
Préstecs bancaris
Crèdit
Bancs
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spelling Monetary policy, macroprudential policy, and banking stability: evidence from the euro areaMaddaloni, AngelaPeydró, José-LuisPolítica monetàriaPréstecs bancarisCrèditBancsWe analyze the impact on lending standards of monetary policy rates and macroprudential policy before the 2008 crisis, and of monetary rates and long-term public liquidity during the crisis. Exploiting the euro-area institutional setting for monetary and prudential policy and using the Bank Lending Survey, we find robust evidence that low monetary policy interest rates soften lending conditions unrelated to borrowers' risk in the period prior to the crisis, and some suggestive evidence of excessive risk-taking due to low interest rates for mortgage loans. Moreover, the impact of low monetary policy rates on the softening of standards is reduced by more stringent prudential policy on either bank capital or loan-to-value ratio. After the start of the 2008 crisis, we find that low monetary rates soften lending conditions that were tightened because of bank capital and liquidity constraints, especially for business loans. Importantly, this softening effect is stronger for banks that borrow more long-term liquidity from the Eurosystem. Therefore, the results suggest that monetary policy rates and public provision of long-term liquidity complement each other in reducing a credit crunch for firms.European Central Bank202020202013info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdfapplication/pdfhttp://hdl.handle.net/10230/44891reponame:Repositorio Digital de la UPFinstname:Universitat Pompeu FabraInglésIJCB. 2013 Mar;9(1):121-69.© European Central Bankinfo:eu-repo/semantics/openAccessoai:repositori.upf.edu:10230/448912026-06-12T07:21:37Z
dc.title.none.fl_str_mv Monetary policy, macroprudential policy, and banking stability: evidence from the euro area
title Monetary policy, macroprudential policy, and banking stability: evidence from the euro area
spellingShingle Monetary policy, macroprudential policy, and banking stability: evidence from the euro area
Maddaloni, Angela
Política monetària
Préstecs bancaris
Crèdit
Bancs
title_short Monetary policy, macroprudential policy, and banking stability: evidence from the euro area
title_full Monetary policy, macroprudential policy, and banking stability: evidence from the euro area
title_fullStr Monetary policy, macroprudential policy, and banking stability: evidence from the euro area
title_full_unstemmed Monetary policy, macroprudential policy, and banking stability: evidence from the euro area
title_sort Monetary policy, macroprudential policy, and banking stability: evidence from the euro area
dc.creator.none.fl_str_mv Maddaloni, Angela
Peydró, José-Luis
author Maddaloni, Angela
author_facet Maddaloni, Angela
Peydró, José-Luis
author_role author
author2 Peydró, José-Luis
author2_role author
dc.subject.none.fl_str_mv Política monetària
Préstecs bancaris
Crèdit
Bancs
topic Política monetària
Préstecs bancaris
Crèdit
Bancs
description We analyze the impact on lending standards of monetary policy rates and macroprudential policy before the 2008 crisis, and of monetary rates and long-term public liquidity during the crisis. Exploiting the euro-area institutional setting for monetary and prudential policy and using the Bank Lending Survey, we find robust evidence that low monetary policy interest rates soften lending conditions unrelated to borrowers' risk in the period prior to the crisis, and some suggestive evidence of excessive risk-taking due to low interest rates for mortgage loans. Moreover, the impact of low monetary policy rates on the softening of standards is reduced by more stringent prudential policy on either bank capital or loan-to-value ratio. After the start of the 2008 crisis, we find that low monetary rates soften lending conditions that were tightened because of bank capital and liquidity constraints, especially for business loans. Importantly, this softening effect is stronger for banks that borrow more long-term liquidity from the Eurosystem. Therefore, the results suggest that monetary policy rates and public provision of long-term liquidity complement each other in reducing a credit crunch for firms.
publishDate 2013
dc.date.none.fl_str_mv 2013
2020
2020
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/10230/44891
url http://hdl.handle.net/10230/44891
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv IJCB. 2013 Mar;9(1):121-69.
dc.rights.none.fl_str_mv © European Central Bank
info:eu-repo/semantics/openAccess
rights_invalid_str_mv © European Central Bank
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv European Central Bank
publisher.none.fl_str_mv European Central Bank
dc.source.none.fl_str_mv reponame:Repositorio Digital de la UPF
instname:Universitat Pompeu Fabra
instname_str Universitat Pompeu Fabra
reponame_str Repositorio Digital de la UPF
collection Repositorio Digital de la UPF
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15.81155

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