From Subprime Loans to Subprime Growth? Evidence for the Euro Area
AbstractThe global financial crisis has highlighted the potential of financial conditions for influencing real economic activity. We examine the linkages between the financial and real sectors in the euro area, finding that (i) bank loan supply responds negatively to declines in bank soundness; (ii) a cutback in bank loan supply has a negative impact on economic activity; (iii) a positive shock to the corporate bond spread lowers industrial output; and (iv) risk indicators for the banking, corporate, and public sectors show an improvement beginning in 2002–03, followed by a major deterioration since 2007. These estimates imply that the currently estimated bank losses would subtract some 2 percentage points from the euro area output (but with considerable uncertainty around the estimates).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 09/69.
Date of creation: 01 Mar 2009
Date of revision:
Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-02 (All new papers)
- NEP-BAN-2009-05-02 (Banking)
- NEP-EEC-2009-05-02 (European Economics)
- NEP-FDG-2009-05-02 (Financial Development & Growth)
- NEP-MAC-2009-05-02 (Macroeconomics)
- NEP-URE-2009-05-02 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kakes, Jan & Sturm, Jan-Egbert, 2002.
"Monetary policy and bank lending:: Evidence from German banking groups,"
Journal of Banking & Finance,
Elsevier, vol. 26(11), pages 2077-2092, November.
- Jan Kakes & Jan-Egbert Sturm, 2001. "Monetary policy and bank lending. Evidence from German banking groups," MEB Series (discontinued) 2001-1, Netherlands Central Bank, Monetary and Economic Policy Department.
- Gertler, Mark & Lown, Cara S, 1999.
"The Information in the High-Yield Bond Spread for the Business Cycle: Evidence and Some Implications,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 15(3), pages 132-50, Autumn.
- Mark Gertler & Cara S. Lown, 2000. "The Information in the High Yield Bond Spread for the Business Cycle: Evidence and Some Implications," NBER Working Papers 7549, National Bureau of Economic Research, Inc.
- Dale F. Gray & Robert C. Merton & Zvi Bodie, 2007.
"New Framework for Measuring and Managing Macrofinancial Risk and Financial Stability,"
NBER Working Papers
13607, National Bureau of Economic Research, Inc.
- Dale F. Gray; & Robert C. Merton & Zvi Bodie, 2009. "New Framework for Measuring and Managing Macrofinancial Risk and Financial Stability," Working Papers Central Bank of Chile 541, Central Bank of Chile.
- Iacoviello, Matteo & Minetti, Raoul, 2008.
"The credit channel of monetary policy: Evidence from the housing market,"
Journal of Macroeconomics,
Elsevier, vol. 30(1), pages 69-96, March.
- Matteo Iacoviello & Raoul Minetti, 2002. "The Credit Channel of Monetary Policy: Evidence from the Housing Market," Boston College Working Papers in Economics 541, Boston College Department of Economics, revised 29 Aug 2003.
- Ignazio Angeloni & Michael Ehrmann, 2003. "Monetary transmission in the euro area: early evidence," Economic Policy, CEPR & CES & MSH, vol. 18(37), pages 469-501, October.
- Brad Setser & Nouriel Roubini & Christian Keller & Mark Allen & Christoph B. Rosenberg, 2002. "A Balance Sheet Approach to Financial Crisis," IMF Working Papers 02/210, International Monetary Fund.
- Driscoll, John C., 2004.
"Does bank lending affect output? Evidence from the U.S. states,"
Journal of Monetary Economics,
Elsevier, vol. 51(3), pages 451-471, April.
- John C. Driscoll, 2003. "Does bank lending affect output? evidence from the U.S. states," Finance and Economics Discussion Series 2003-31, Board of Governors of the Federal Reserve System (U.S.).
- Bruggeman, Annick & Donnay, Marie, 2003. "A monthly monetary model with banking intermediation for the euro area," Working Paper Series 0264, European Central Bank.
- Christian Keller & Peter Kunzel & Marcos Souto, 2007. "Measuring Sovereign Risk in Turkey: An Application of the Contingent Claims Approach," IMF Working Papers 07/233, International Monetary Fund.
- Jorge A. Chan-Lau & Iryna V. Ivaschenko, 2002. "The Corporate Spread Curve and Industrial Production in the United States," IMF Working Papers 02/8, International Monetary Fund.
- Altunbas, Yener & Fazylov, Otabek & Molyneux, Philip, 2002. "Evidence on the bank lending channel in Europe," Journal of Banking & Finance, Elsevier, vol. 26(11), pages 2093-2110, November.
- Yingbin Xiao & Dale F. Gray & Cheng Hoon Lim & Michael T. Gapen, 2004. "The Contingent Claims Approach to Corporate Vulnerability Analysis: Estimating Default Risk and Economy-wide Risk Transfer," IMF Working Papers 04/121, International Monetary Fund.
- Tigran Poghosyan & Martin CihÃ¡k, 2009. "Distress in European Banks: An Analysis Based on a New Dataset," IMF Working Papers 09/9, International Monetary Fund.
- Dale F. Gray & Elena Loukoianova & Samuel W. Malone & Cheng Hoon Lim, 2008. "A Risk-Based Debt Sustainability Framework: Incorporating Balance Sheets and Uncertainty," IMF Working Papers 08/40, International Monetary Fund.
- Mody, Ashoka & Taylor, Mark P., 2004. "Financial predictors of real activity and the financial accelerator," Economics Letters, Elsevier, vol. 82(2), pages 167-172, February.
- Adolfo Barajas & Roberto Steiner, 2002. "Credit Stagnation in Latin America," IMF Working Papers 02/53, International Monetary Fund.
- Jesper Berg & Annalisa Ferrando & Gabe de Bondt & Silvia Scopel, 2005. "The bank lending survey for the euro area," Occasional Paper Series 23, European Central Bank.
- Luisa Carpinelli, 2009. "Real effects of banking crises: a survey of the literature," Questioni di Economia e Finanza (Occasional Papers) 55, Bank of Italy, Economic Research and International Relations Area.
- Fabio C. Bagliano & Claudio Morana, 2011.
"Macro-finance interactions in the US: A global perspective,"
23, Former Department of Economics and Public Finance "G. Prato", University of Torino.
- Fabio C. Bagliano & Claudio Morana, 2012. "Macro-Finance Interactions in the US: A Global Perspective," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
- Adam Gersl & Petr Jakubik, 2010. "Procyclicality of the Financial System and Simulation of the Feedback Effect," Occasional Publications - Chapters in Edited Volumes, in: CNB Financial Stability Report 2009/2010, chapter 0, pages 110-119 Czech National Bank, Research Department.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).
If references are entirely missing, you can add them using this form.