Credit supply and demand in unconventional times

Carlo Altavilla, Miguel Boucinha (), Sarah Holton and Steven Ongena

No 2202, Working Paper Series from European Central Bank

Abstract: Do borrowers demand less credit from banks with weak balance sheet positions? To answer this question we use novel bank-specific survey data matched with confidential balance sheet information on a large set of euro area banks. We find that, following a conventional monetary policy shock, bank balance sheet strength influences not only credit supply but also credit demand. The resilience of lenders plays an important role for firms when selecting whom to borrow from. We also assess the impact on credit origination of unconventional monetary policies using survey responses on the exposure of individual banks to quantitative easing and negative interest rate policies. We find that both policies do stimulate loan supply even after fully controlling for bank-specific demand, borrower quality, and balance sheet strength. JEL Classification: E51, G21

Keywords: balance sheet strength; bank lending survey; credit demand and supply; non-standard monetary policy (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-acc, nep-ban, nep-cba, nep-eec and nep-mon
Note: 2279334
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Credit Supply and Demand in Unconventional Times (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20182202

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