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MONETARY POLICY EFFECTIVENESS IN STIMULATING THE CEES CREDIT RECOVERY

Dan Olteanu
Authors registered in the RePEc Author Service: Cosmin Olteanu ()

Studii Financiare (Financial Studies), 2015, vol. 19, issue 3, 8-24

Abstract: This paper aims to appraise the effectiveness of central bank interest rate and quantitative easing measures in boosting private credit recovery from several CEE countries, after the crisis. We found that the monetary policy endeavors significantly succeeded in reducing the money market tensions following the external financial shock. The short-term interbank interest rate strongly responded to the changes in central bank refinancing rate and commercial bank reserves, in all of the analysed countries. Nevertheless, the subsequent links of the transmission chain did not perform as well. Uncertainty in the money market perpetuated a high term spread, while credit risk kept the lending rate at relative high values. The inability of central banks to further stimulate the credit supply put a question mark over the truly factual control of the decision makers on money creation by commercial banks and, consequently, on national economic activity on the whole.

Keywords: monetary transmission; credit supply; Eastern Europe (search for similar items in EconPapers)
JEL-codes: E58 E52 E51 (search for similar items in EconPapers)
Date: 2015
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