The impact of monetary conditions on bank lending to households

Gyozo Gyongyosi, Steven Ongena and Ibolya Schindele

No 2124, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: We study the impact of monetary conditions on the supply of mortgage credit by banks to households. Using comprehensive credit register data from Hungary, we first establish a "bank-lending-to-households" channel by showing that monetary conditions affect the supply of mortgage credit in volume. We then study the impact of monetary conditions on the composition of mortgage credit along its currency denomination and borrower risk. We find that expansionary domestic monetary conditions increase the supply of mortgage credit to all households in the domestic currency and to risky households in the foreign currency. Because most households are unhedged, bank lending in multiple currencies may involve additional risk taking. Changes in foreign monetary conditions affect lending in the foreign currency more than in the domestic currency, and also differ in their compositional impact along firm risk.

Keywords: bank balance-sheet channel; household lending; monetary policy; foreign currency lending (search for similar items in EconPapers)
JEL-codes: E51 F3 G21 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac and nep-mon
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://www.econstor.eu/bitstream/10419/195378/1/1663437041.pdf (application/pdf)

Related works:
Working Paper: The Impact of Monetary Conditions on Bank Lending to Households (2021)
Working Paper: The Impact of Monetary Conditions on Bank Lending to Households (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:2124

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