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Did Interest Rates at the Zero Lower Bound Affect Lending of Commercial Banks? Evidence for the Euro Area

  • Ansgar Belke EMAIL logo and Christian Dreger


The paper examines the bank lending activities of banks in a low interest rate environment. External financing of small- and medium-sized enterprises in the euro area primarily takes place via bank loans and not through capital markets. Based on the Bankscope database, bank balance sheet data is utilized. Control variables are included, such as for the system of banking regulation. The panel estimation includes 706 banks from 15 Euro area member states and is conducted for the period 2000 to 2015. All models show a significant positive impact of lower interest rates on net lending. In particular, the results do not indicate that credit is restricted if interest rates move towards the zero-lower bound.

JEL Classification: E44; E51; E52


We would like to thank the Wissenschaftsförderung der Sparkassen-Finanzgruppe e. V. for financial support.


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Article note

This article is part of the special issue “20 Years of European Monetary Union” published in the Journal of Economics and Statistics.

Received: 2018-10-31
Revised: 2018-12-31
Accepted: 2019-02-03
Published Online: 2019-08-08
Published in Print: 2019-09-25

© 2019 Oldenbourg Wissenschaftsverlag GmbH, Published by De Gruyter Oldenbourg, Berlin/Boston

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