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Quantitative easing in the euro area and SMEs’ access to finance: Who benefits the most?

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Abstract

After the global financial crisis and during the European sovereign debt crisis, bank lending to companies in the euro area slowed down dramatically bringing the economy close to a credit crunch. It was only after the start of the ECB’s quantitative easing programme in early 2015 that bank lending improved sustainably. The study analyses the impact of the ECB’s Public Sector Purchase Programme (PSPP) on the access to finance of small and medium sized enterprises (SME) using firm-level data of the Survey on the Access to Finance of Enterprises (SAFE) and a fixed effects model. The analysis comprises several measures of financial access such as credit availability, financial constraints and interest rates. The micro level nature of the data allows to distinguish between aggregate and heterogeneous effects across firm size, age, sector and country. The ECB’s government bond purchases improved financial access on the aggregate euro area level and particularly in the periphery of the euro area. Hence, countries which need the most stimulus benefit the most from the Public Sector Purchase Programme.

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  • Anne Kathrin Funk, 2018. "Quantitative easing in the euro area and SMEs’ access to finance: Who benefits the most?," KOF Working papers 18-447, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:18-447
    DOI: 10.3929/ethz-b-000312397
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    More about this item

    Keywords

    Unconventional monetary policy; credit channel; bank lending; ECB; SME;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • 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

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