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The Financial Accelerator in Europe after the Financial Crisis

Klára Baková ()
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Klára Baková: Mendel University in Brno, Czech Republic

European Journal of Business Science and Technology, 2018, vol. 4, issue 2, 143-155

Abstract: This paper investigates the mechanism of a financial accelerator. In particular, it examines the procyclicality of credit margins in Europe after the financial crisis, with an additional split into small, medium and large-sized banks. The empirical analysis is in contrast with contemporary authors because it approves that the financial accelerator is not present on the European market after the financial crisis. It could be caused by multiple factors, for example structural changes during the financial crisis, a change in the behaviour of commercial banks or extremely low interest rates. We tested our hypothesis on a dataset that consists of a data panel with annual data for the period 1998–2015 and includes 2,489 banks from 36 European countries from the Bankscope database. We also provide robust empirical proof that such behaviour was not occurring during the financial crisis or after the financial crisis in the European banking system.

Keywords: credit cycle; financial accelerator; interest margin (search for similar items in EconPapers)
JEL-codes: C23 E51 G21 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:men:journl:v:4:y:2018:i:2:p:143-155