Financial Systems and the Role of Banks in Monetary Policy Transmission in the Euro Area
By Michael Ehrmann, L. Gambacorta, Jorge Martínez-Pagés, P. Sevestre, Andreas Worms. Social Science Research Network, 2001
642 citations recorded by the source corpus.
This paper offers a comprehensive comparison of the structure of banking and financial markets in the euro area. Based on this, several hypotheses about the role of banks in monetary policy transmission are developed. Many of the predictions that have been proposed for the U.S. are deemed unlikely to apply in Europe. Testing these hypotheses we find that monetary policy does alter bank loan supply, with the effects most dependent on the liquidity of individual banks. Unlike in the US, the size of a bank does generally not explain its lending reaction. We also show that the standard publicly available database, BankScope, obscures the heterogeneity across banks. Indeed, for several types of questions BankScope data suggest very different answers than more complete data that reside at national central banks.
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/053480c3c950679e4ccd84b5fef35585e0af60d2
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
- L. Gambacorta
- David Marqués-Ibáñez
- Yener Altunbaş
- G. Ferri
- Eeva Kerola
- Panu Kalmi
- Benoît Mojon
- Ignazio Angeloni
In Finance
- L. Gambacorta
- David Marqués-Ibáñez
- Yener Altunbaş
- G. Ferri
- Eeva Kerola
- Panu Kalmi
- Ignazio Angeloni
- Benoît Mojon
Citations in the corpus
- Aggregate Loans to the Euro Area Private Sector (2003, positive): “Ehrmann et al. (2001) provide evidence on the relevance of loan supply effects in the euro area.”
- Is bank portfolio riskiness procyclical: Evidence from Italy using a vector autoregression (2008, background): “Gambacorta (2000), “La crediti view in economia aperta: un’applicazione al caso italiano”, Banca d'Italia – Temi di discussione, 388.”
- Ensuring Financial Stability: Financial Structure and the Impact of Monetary Policy on Asset Prices (2008, neutral): “12 have argued that the impact of monetary policy on the economy varies across countries depending on the financial structure of the economy (Cecchetti 1999, Ehrmann et al. 2003, Giuliodori 2005). Moreover, it is well documented that the financial structure differs significantly between the countrie”
- Does monetary policy affect bank risk (2014, background): “3 The Bank Lending Channel and the Risk-Taking Channel The risk-taking channel also has some overlaps with the bank lending channel (Bernanke and Blinder 1988; Ehrmann et al. 2003).”