The impact of the Public Sector Purchase Programme on lending to SMEs

Vlad Skovorodov and Rui Silva

Journal of Macroeconomics, 2025, vol. 83, issue C

Abstract: We study the impact of the Public Sector Purchase Programme (PSPP) between 2015 and 2018 on lending volumes in the Eurozone. We find a connection between purchases under the PSPP and: (i) lending volumes on types of loans mainly obtained by SMEs; (ii) loans below 1 million euros during the expansion phase of the program until the end of 2016, and loans above 1 million euros in its contraction phase; (iii) substantial changes in lending volumes in economies with high levels of public debt and distressed financial systems, and; (iv) types of loans mainly obtained by SMEs in more resilient economies. These findings point to the effectiveness of the credit channel as a transmission mechanism of unconventional monetary policy and support the decision of the ECB to reactivate the program at the end of 2019.

Keywords: Unconventional monetary policy; PSPP; Credit market; SMEs (search for similar items in EconPapers)
JEL-codes: E30 E32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:83:y:2025:i:c:s0164070424000739

DOI: 10.1016/j.jmacro.2024.103659

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