The transmission of unconventional monetary policy to bank credit supply: Evidence from the TLTRO

Antonio Afonso and Joana Sousa‐Leite
Authors registered in the RePEc Author Service: Joana Sousa-Leite

Manchester School, 2020, vol. 88, issue S1, 151-171

Abstract: We assess the transmission of the Targeted Longer‐Term Refinancing Operations (TLTRO) to the bank credit supply for the Euro area (2014–2017) and for Portugal (2011:02–2018:01), using a panel data setup. In order to estimate a causal effect, we construct an instrumental variable (IV) using the maximum borrowing allowance in the TLTRO. For the Euro area, we find a positive impact of the TLTRO on the amount of credit granted to the real economy, in particular in the less vulnerable countries. For Portugal, using a difference‐in‐differences model, we find that bidding banks set lower interest rates in relation to non‐bidding banks and the difference seems to be larger in 2016 and 2017.

Date: 2020
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Citations: View citations in EconPapers (22)

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https://doi.org/10.1111/manc.12335

Related works:
Working Paper: The Transmission of Unconventional Monetary Policy to Bank Credit Supply: Evidence from the TLTRO (2019)
Working Paper: The transmission of unconventional monetary policy to bank credit supply: evidence from the TLTRO (2019)
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