Jump to ContentJump to Main Navigation
Show Summary Details
More options …

Jahrbücher für Nationalökonomie und Statistik

Journal of Economics and Statistics

Editor-in-Chief: Winker, Peter

Ed. by Büttner, Thiess / Riphahn, Regina / Smolny, Werner / Wagner, Joachim


IMPACT FACTOR 2018: 0.200
5-year IMPACT FACTOR: 0.309

CiteScore 2018: 0.50

SCImago Journal Rank (SJR) 2018: 0.154
Source Normalized Impact per Paper (SNIP) 2018: 0.382

Online
ISSN
2366-049X
See all formats and pricing
More options …
Volume 239, Issue 5-6

Issues

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

Ansgar Belke
  • Corresponding author
  • University of Duisburg-Essen, Essen, Germany
  • CEPS Brussels, Brussels, Belgium
  • King’s College London, London, UK
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
/ Christian Dreger
Published Online: 2019-08-08 | DOI: https://doi.org/10.1515/jbnst-2018-0098

Abstract

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.

Keywords: bank lending; banking regulation; monetary transmission mechanisms; low interest rate environment

JEL Classification: E44; E51; E52

References

  • Albacete, N., P. Lindner (2017), How Strong Is the Wealth Channel of Monetary Policy Transmission? A Microeconometric Evaluation for Austria, Monetary Policy & the Economy, Oesterreichische Nationalbank. Issue Q2/17: 32–53.Google Scholar

  • Altavilla, C., M. Boucinha, J.-L. Peydro (2017), Monetary Policy and Bank Profitability in a Low Interest Rate Environment, ECB Working Paper 2105, European Central Bank, Frankfurt/Main.Google Scholar

  • Altavilla, C., F. Canova, M. Ciccarelli (2016), Mending the Broken Link: Heterogeneous Bank Lending and Monetary Policy Pass-Through, ECB Working Paper 1978, European Central Bank, Frankfurt/Main.Google Scholar

  • Altavilla, C., G. Carboni, R. Motto (2015), Asset Purchase Programmes and Financial Markets: Lessons from the Euro Area, ECB Working Paper 1864, European Central Bank, Frankfurt/Main.Google Scholar

  • Altunbas, Y., L. Gambacorta, D. Marqués (2014), Does Monetary Policy Affect Bank Risk? International Journal of Central Banking 10: 95–135.Google Scholar

  • Apergis, N., C. Christou (2015), The Behaviour of the Bank Lending Channel When Interest Rates Approach the Zero Lower Bound: Evidence from Quantile Regressions. Economic Modelling 49: 296–307.Web of ScienceCrossrefGoogle Scholar

  • Barth, J., G. Caprio, R. Levine (2013), Bank Regulation and Supervision in 180 Countries from 1999 to 2011. Journal of Financial Economic Policy 5: 111–219.CrossrefGoogle Scholar

  • Belke, A., U. Haskamp, R. Setzer (2016), Bank Efficiency and Regional Growth in Europe: New Evidence from Micro-Data, ECB Working Paper Series 1983, European Central Bank, Frankfurt/Main.Google Scholar

  • Belke, A., W. Orth, R. Setzer (2010), Liquidity and the Dynamic Pattern of Asset Price Adjustment: A Global View. Journal of Banking and Finance 34: 1933–1945.CrossrefGoogle Scholar

  • Belke, A., N. Potrafke (2012), Does Government Ideology Matter in Monetary Policy? A Panel Data Analysis for OECD Countries Journal of International Money and Finance 31/5: 1126–1139.Web of ScienceGoogle Scholar

  • Berger, A.N., G. Udell (1994), Did Risk-Based Capital Allocate Bank Credit and Cause a “Credit Crunch” in the United States? Journal of Money, Credit, and Banking 26: 585–628.CrossrefGoogle Scholar

  • Bernanke, B., M. Gertler (1995), Inside the Black Box: The Credit Channel of Monetary Policy. Journal of Economic Perspectives 9 (4): 27–48.CrossrefGoogle Scholar

  • Borio, C., L. Gambacorta (2017), Monetary Policy and Bank Lending in a Low Interest Rate Environment: Diminishing Effectiveness? Journal of Macroeconomics 54: 217–231.Web of ScienceCrossrefGoogle Scholar

  • Borio, C., L. Gambacorta, B. Hofmann (2017), The Effects of Monetary Policy on Bank Profitability. International Finance 20: 48–63.CrossrefGoogle Scholar

  • Busch, R., C. Memmel (2017), Banks’ Net Interest Margin and the Level of Interest Rates. Credit and Capital Markets 50: 363–392.CrossrefGoogle Scholar

  • Cetorelli, N., L.S. Goldberg (2012), Banking Globalization and Monetary Transmission. Journal of Finance 67: 1811–1843.Web of ScienceCrossrefGoogle Scholar

  • Claessens, S., N. Coleman, M. Donnelly (2016), ‘Low-For-Long’ Interest Rates and Net Interest Margins of Banks in Advanced Foreign Economies, IFDP Notes, April.Google Scholar

  • Darmouni, O., A. Rodnyansky (2017), The Effects of Quantitative Easing on Bank Lending Behaviour. Review of Financial Studies 30: 3858–3887.CrossrefGoogle Scholar

  • Deutsche Bundesbank (2001), The New Basel Capital Accord (Basel II), Monthly Report April, 15–44.Google Scholar

  • Deutsche Bundesbank (2018), Finalising Basel III, Monthly Report, January, 73–89.Google Scholar

  • Dreger, C., J. Wolters (2015), Unconventional Monetary Policy and Money Demand. Journal of Macroeconomics 46: 40–54.CrossrefWeb of ScienceGoogle Scholar

  • Ferri, G., P. Kalmi, E. Kerola (2014), Does Bank Ownership Affect Lending Behavior? Evidence from the Euro Area. Journal of Banking and Finance 48: 194–209.CrossrefGoogle Scholar

  • Francis, W., M. Osborne (2009), Bank Regulation, Capital and Credit Supply: Measuring the Impact of Prudential Standards, Occasional Paper Series 36, UK Financial Services Authority, September.Google Scholar

  • Friedrich, R.J. (1982), In Defence of Multiplicative Terms in Multiple Regression Equations. American Journal of Political Science 26: 797–833.CrossrefGoogle Scholar

  • Gambacorta, L., D. Marques-Ibanez (2011), The Bank Lending Channel: Lessons from the Crisis. Economic Policy 26 (66): 135–182.CrossrefWeb of ScienceGoogle Scholar

  • Hamilton, J.D. (1994), Time Series Analysis, Princeton University Press, Princeton, NJ.Google Scholar

  • Hancock, D., J. Wilcox (1994), Bank Capital and Credit Crunch: The Roles of Risk-Weighted and Unweighted Capital Regulations. Journal of the American Real Estate and Urban Economics Association 22: 59–91.CrossrefGoogle Scholar

  • Haskamp, U. (2018), Spillovers of Banking Regulation: The Effect of the German Bank Levy on the Lending Rates of Regional Banks and Their Local Competitors. International Economics and Economic Policy 15: 449–466.CrossrefGoogle Scholar

  • Jaccard, J., R. Turrisi (2003), Interaction Effects in Multiple Regression, 2nd ed., Quantitative applications in the social sciences series, Sage University Paper, Thousand Oaks et al.Google Scholar

  • Kashyap, A.K., J. Stein (1994), Monetary policy and bank lending, in Mankiw NG (ed): Monetary policy, Chicago University Press, 221–256.Google Scholar

  • Kashyap, A.K., J. Stein (1995), The impact of monetary policy on bank balance sheets, FRB Chicago Economic Note, Federal Reserve Bank of Chicago.Google Scholar

  • Kashyap, A.K., J.C. Stein (2000), What Do a Million Observations on Banks Have to Say about the Monetary Transmission Mechanism? American Economic Review 90: 407–428.CrossrefGoogle Scholar

  • Kosak, M., S. Li, I. Loncarski, M. Marinc (2015), Quality of Bank Capital and Bank Lending Behaviour during the Global Financial Crisis. International Review of Financial Analysis 37: 168–183.CrossrefGoogle Scholar

  • Levine, R. (2005), Finance and Growth: Theory and Evidence. PP. 865–934 in: P. Aghion, D. Sn (eds.), Handbook of Economic Growth, Elsevier, Amsterdam.Google Scholar

  • Macroeconomic Assessment Group (2010), Assessing the Macroeconomic Impact of the Transition to Stronger Capital and Liquidity Requirements, Final Report, Basel Committee on Banking Supervision.Google Scholar

  • OECD (2011), Macroeconomic Impact of Basel III, OECD Economics Department Working Paper 844, Organization for Economic Co-Operation and Development, Paris.Google Scholar

  • Paiella, M. (2009), The Stock Market, Housing and Consumer Depending: A Survey of the Evidence on Wealth Effects. Journal of Economic Surveys 23 (5): 947–973.CrossrefGoogle Scholar

  • Peek, J., E. Rosengren (1995), The Capital Crunch: Neither a Borrower or a Lender Be. Journal of Money, Credit and Banking 27 (3): 625–638.CrossrefGoogle Scholar

  • Sims, C.A., J.H. Stock, M.W. Watson (1990), Inference in Linear Time Series Models with Some Unit Roots. Econometrica 58 (1): 113–144.CrossrefGoogle Scholar

  • Thakor, A.V. (1996), Capital Requirements, Monetary Policy, and Aggregate Bank Lending: Theory and Empirical Evidence. Journal of Finance 51: 279–324.CrossrefGoogle Scholar

  • Weale, M., T. Wieladek (2016), What are the Macroeconomic Effects of Asset Purchases? Journal of Monetary Economics 79: 81–93.CrossrefWeb of ScienceGoogle Scholar

About the article

Received: 2018-10-31

Accepted: 2019-02-03

Revised: 2018-12-31

Published Online: 2019-08-08

Published in Print: 2019-09-25


Citation Information: Jahrbücher für Nationalökonomie und Statistik, Volume 239, Issue 5-6, Pages 841–860, ISSN (Online) 2366-049X, ISSN (Print) 0021-4027, DOI: https://doi.org/10.1515/jbnst-2018-0098.

Export Citation

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

Comments (0)

Please log in or register to comment.
Log in