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Trusting the bankers: A new look at the credit channel of monetary policy

Matteo Ciccarelli, Angela Maddaloni and Jose-Luis Peydro ()

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Credit supply and demand changes are mostly unobserved, thus identifying completely the transmission of monetary policy through the credit channel is unfeasible. Bank lending surveys by central banks, however, contain reliable quarterly information on changes in loan conditions due to bank, Örm and household balance sheet strength and on changes in loan demand. Using the U.S. and the unique Euro area surveys, we find that the credit channel amplifies a monetary policy shock on GDP and prices, through the balance-sheets of households, firms and banks. For corporate loans, amplification is highest through the bank lending and the borrowerís balance sheet channel; for households, demand is the strongest channel.

Keywords: Credit channel; firm and household balance-sheet channels; bank lending channel; credit crunch; credit supply; monetary policy. (search for similar items in EconPapers)
JEL-codes: E32 E44 E5 G01 G21 (search for similar items in EconPapers)
Date: 2013-07
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Related works:
Journal Article: Trusting the Bankers: A New Look at the Credit Channel of Monetary Policy (2015) Downloads
Journal Article: Trusting the bankers: A new look at the credit channel of monetary policy (2015) Downloads
Working Paper: Trusting the bankers: a new look at the credit channel of monetary policy (2010) Downloads
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