In this article, we present the impact of the monetary policy stance of the
European Central Bank(ECB)since 2007 on bank lending in the euro area and
compare the effects of the main measures: interest rate changes, liquidity
provision, and asset purchase programmes. We also analyse the channels
through which monetary policy might influence the banking system and narrow
our focus to the individual countries. The main results indicate stimulating
impact of ECB?s policy stance on bank lending that extends its influence
mainly through interest rate cuts further supported by the liquidity
provision and asset purchase programmes. However, we also find considerable
differences across the member states, of ten depending on the state of the
banking system and loan demand in the member state. The results support the
variety of monetary policy measures introduced by the ECB, as each played its
own role in supporting the banking system and encouraging bank lending in
the euro area.
A VAR description of the effects of monetary policy in the individual countries of the euro area
