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ECB Corporate QE and the Loan Supply to Bank-Dependent Firms

Author

Listed:
  • Frank Betz

    (European Investment Bank)

  • Roberto A. De Santis

    (European Central Bank)

Abstract

Using a representative sample of euro-area businesses, we show that Eurosystem purchases of corporate bonds under the Corporate Sector Purchase Programme (CSPP) triggered a shift in bank loan supply in favor of firms that do not have access to bond-based financing. Identification comes from matching bank-dependent firms to their lenders and accounting for the effect of CSPP on banks' activity in the syndicated loan market. Credit access improved relatively more for firms borrowing from banks relatively more exposed to CSPPeligible firms. This result applies regardless of bank balance sheet quality as measured by tier 1, NPL, and liquidity ratios.

Suggested Citation

  • Frank Betz & Roberto A. De Santis, 2022. "ECB Corporate QE and the Loan Supply to Bank-Dependent Firms," International Journal of Central Banking, International Journal of Central Banking, vol. 18(2), pages 107-148, June.
    • Handle: RePEc:ijc:ijcjou:y:2022:q:2:a:3
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    References listed on IDEAS

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    3. Marie Finnegan & Supriya Kapoor, 2023. "ECB unconventional monetary policy and SME access to finance," Small Business Economics, Springer, vol. 61(3), pages 1253-1288, October.
    4. Andrejs Zlobins, 2023. "Is There a Portfolio Rebalancing Channel of QE in Latvia?," Working Papers 2023/05, Latvijas Banka.

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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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