Energy uncertainty index and European banks

Whelsy Boungou, Bastien Dufau, Mahdi Fawaz and Devi Prasad Dash

Economics Letters, 2025, vol. 247, issue C

Abstract: In this article, we investigate how energy uncertainties influence bank behavior. To achieve this purpose, we use a dataset of 4632 banks in the Eurozone between 2000 and 2022. We observe that, in response to growing energy uncertainties, banks reduce the cost of credit and increase their loan offers (especially corporate loans). This increase in loan supply leads to an increase in customer deposits. This in turn improves the bank's performance.

Keywords: Energy uncertainty index; Lending behavior; Bank performance (search for similar items in EconPapers)
JEL-codes: D80 G2 Q43 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176524006062

DOI: 10.1016/j.econlet.2024.112122

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