Bank Lending Channel of Monetary Policy Before and After the Global Financial Crisis

2021 ◽  
Vol 39 (1) ◽  
pp. 37-62
Author(s):  
Hyun Joung Kim
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Bank Lending ◽  
Bank Lending Channel ◽  
Lending Channel ◽  
Before And After ◽  
The Global Financial Crisis

scholarly journals Business cycle (de)synchronization in the aftermath of the global financial crisis: implications for the Euro area

2015 ◽  
Vol 19 (5) ◽  
Author(s):  
Stelios Bekiros ◽  
Duc Khuong Nguyen ◽  
Gazi Salah Uddin ◽  
Bo Sjö
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Business Cycles ◽  
Euro Area ◽  
Global Financial Crisis ◽  
Wavelet Coherence ◽  
Before And After ◽  
The Global Financial Crisis ◽  
The Cost ◽  
European Economies

AbstractThe introduction of Euro currency was a game-changing event intended to induce convergence of Eurozone business cycles on the basis of greater monetary and fiscal integration. The benefit of participating into a common currency area exceeds the cost of losing autonomy in national monetary policy only in case of cycle co-movement. However, synchronization was put back mainly due to country-specific differences and asymmetries in terms of trade and fiscal policies that became profound at the outset of the global financial crisis. As opposed to previous studies that are mostly based on linear correlation or causality modeling, we utilize the cross-wavelet coherence measure to detect and identify the scale-dependent time-varying (de)synchronization effects amongst Eurozone and the broad Euro area business cycles before and after the financial crisis. Our results suggest that the enforcement of an active monetary policy by the ECB during crisis periods could provide an effective stabilization instrument for the entire Euro area. However, as dynamic patterns in the lead-lag relationships of the European economies are revealed, (de)synchronization varies across different frequency bands and time horizons.

Determinants of Bank Lending in Europe and the United States

2018 ◽  
Author(s):  
Brunella Bruno ◽  
Alexandra D'Onofrio ◽  
Immacolata Marino
Keyword(s):  
United States ◽  
Global Financial Crisis ◽  
Bank Lending ◽  
The United States ◽  
Bank Lending Channel ◽  
Loan Portfolio ◽  
Government Bonds ◽  
Lending Channel ◽  
Main Bank ◽  
The Global Financial Crisis

We provide a comprehensive analysis of the main drivers of bank lending in Europe and the United States over the period from 2008 to 2014. We relate bank characteristics prior to the global financial crisis to their lending behaviour during and after the crisis period. Our analysis confirms the existence of a bank lending channel, that seems stronger in Europe than in the United States, especially if we look at corporate loans rather than at the whole loan portfolio. We uncover that the main bank characteristics affecting lending are size, capitalization, liquidity, and ownership structure, as well as, to a lesser extent, reliance on deposits and exposure to government bonds. Some of these factors have indeed shielded bank lending as predicted, but the results are not always in the expected direction, which points to the existence of a revised version of the traditional bank lending channel.

scholarly journals Unconventional U.S. Monetary Policy: New Tools, Same Channels?

2018 ◽  
Vol 11 (4) ◽  
pp. 71 ◽  
Author(s):  
Martin Feldkircher ◽  
Florian Huber
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Extended Period ◽  
Bank Lending ◽  
Distinct Pattern ◽  
Output Growth ◽  
Monetary Policy Shock ◽  
The Global Financial Crisis

In this paper, we compare the transmission of a conventional monetary policy shock with that of an unexpected decrease in the term spread, which mirrors quantitative easing. Employing a time-varying vector autoregression with stochastic volatility, our results are two-fold: First, the spread shock works mainly through a boost to consumer wealth growth, while a conventional monetary policy shock affects real output growth via a broad credit/bank lending channel. Second, both shocks exhibit a distinct pattern over our sample period. More specifically, we find small output effects of a conventional monetary policy shock during the period of the global financial crisis and stronger effects in its aftermath. This might imply that when the central bank has left the policy rate unaltered for an extended period of time, a policy surprise might boost output particularly strongly. By contrast, the spread shock has affected output growth most strongly during the period of the global financial crisis and less so thereafter. This might point to diminishing effects of large-scale asset purchase programs.

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