The Impact of Monetary Conditions on Bank Lending to Households

Gyozo Gyongyosi, Steven Ongena and Ibolya Schindele
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Ibolya Schindele: BI Norwegian Business School; Central Bank of Hungary

No 21-64, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We study how monetary conditions change the supply by banks of mortgage credit to households. We exploit the widespread presence of foreign currency mortgages in Hungary and study this country`s comprehensive credit registry. Changes in monetary conditions not only affect the supply of credit in volume, but also in its currency and risk composition. Hence, we establish a “bank‐lending‐to‐households” channel of monetary policy that is heterogeneous. While the availability of foreign currency mortgages weakens the domestic bank‐lending channel overall, weakly capitalized domestic banks relying on swap transactions for their foreign currency lending are more sensitive to changes in monetary conditions.

Keywords: Bank balance‐sheet channel; household lending; monetary policy; foreign currency lending. (search for similar items in EconPapers)
JEL-codes: E51 F3 G21 (search for similar items in EconPapers)
Pages: 76 pages
Date: 2021-09
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec, nep-isf, nep-mac and nep-mon
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Related works:
Working Paper: The Impact of Monetary Conditions on Bank Lending to Households (2019)
Working Paper: The impact of monetary conditions on bank lending to households (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2164

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