Bank risks and lending outcomes: Evidence from QE

Alex Sclip, Claudia Girardone, Federico Beltrame and Andrea Paltrinieri

Journal of International Money and Finance, 2021, vol. 118, issue C

Abstract: This paper investigates the impact of bank risk positions on their lending outcomes during quantitative easing (QE) interventions. We find that after the first and second round of QE, banks with lower default probabilities expand lending more in comparison to their risky counterparts. However, differences were no longer relevant in the third round of QE, which occurred at a time when the banking sector health was improved relative to QE1. Our findings suggest that bank riskiness is important for the transmission of unconventional monetary policy interventions.

Keywords: Bank risks; Lending; Monetary policy; Large scale asset purchases; Quantitative easing; Federal reserve (search for similar items in EconPapers)
JEL-codes: G20 G21 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:118:y:2021:i:c:s0261560621001261

DOI: 10.1016/j.jimonfin.2021.102475

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