Illiquid Collateral and Bank Lending during the European Sovereign Debt Crisis
Jean Barthélemy (),
Vincent Bignon () and
Benoît Nguyen ()
Working papers from Banque de France
We assess the effect of accepting illiquid assets as collateral at the central bank on banks’ lending activity. We study the lending activity of the 177 largest banks in the Euro area between 2011m1 and 2014m12 and the composition of their pool of collateral pledged with the Eurosystem. Panel regression estimates show that the banks that pledged more illiquid collateral with the Eurosystem increased their lending to non-financial firms and households: a one standard deviation increase in the volume of illiquid collateral increase lending by 0.6%.
Keywords: collateral; loans; central bank; euro crisis. (search for similar items in EconPapers)
JEL-codes: E52 E58 G01 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-eec, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
https://publications.banque-france.fr/sites/defaul ... vail-631_2017-06.pdf (application/pdf)
Working Paper: Illiquid Collateral and Bank Lending during the European Sovereign Debt Crisis (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:631
Access Statistics for this paper
More papers in Working papers from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC.
Bibliographic data for series maintained by Michael brassart ().