QE and the Bank Lending Channel in the United Kingdom

Nick Butt, Rohan Churm, Michael McMahon, Arpad Morotz and Jochen Schanz
Additional contact information
Nick Butt: Bank of England
Arpad Morotz: Bank of England

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We test whether quantitative easing (QE), in addition to boosting aggregate demand and inflation via portfolio rebalancing channels, operated through a bank lending channel (BLC) in the UK. Using Bank of England data together with an instrumental variables approach, we find no evidence of a traditional BLC associated with QE. We show, in a simple framework, that the traditional BLC is diminished if the bank receives 'flighty' deposits (deposits that are likely to quickly leave the bank). We show that QE gave rise to such flighty deposits which may explain why we nd no evidence of a BLC.

Keywords: Monetary policy; Bank lending channel; Quantitative Easing (search for similar items in EconPapers)
JEL-codes: E51 E52 G20 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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https://warwick.ac.uk/fac/soc/economics/research/w ... erp_1073_mcmahon.pdf

Related works:
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the bank lending channel in the United Kingdom (2015)
Working Paper: QE and the bank lending channel in the United Kingdom (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1073

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