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Assessing bank lending to corporates in the euro area since 2014

Author

Listed:
  • Adalid, Ramón
  • Falagiarda, Matteo
  • Musso, Alberto

Abstract

Bank lending to euro area corporates has gradually recovered since 2014, supported by very favourable financing conditions. An assessment of this recovery indicates that it has been broadly in line with economic activity, although loan growth has remained below pre-crisis levels. The moderate pace of the recovery in loan growth mainly reflects the post-crisis deleveraging process and the growing relevance of alternative sources of financing, as well as somewhat weaker economic activity compared with the pre-crisis period. Nevertheless, evidence suggests that bank lending to non-financial corporations has supported firms’ business investment. The strength of the relationship between business investment and bank lending to corporates has, however, differed across euro area countries. Qualitative and quantitative evidence shows that the recovery in bank lending to corporates has received strong support from the ECB’s non-standard monetary policy measures. JEL Classification: E4, E44, E5, E52

Suggested Citation

  • Adalid, Ramón & Falagiarda, Matteo & Musso, Alberto, 2020. "Assessing bank lending to corporates in the euro area since 2014," Economic Bulletin Articles, European Central Bank, vol. 1.
    • Handle: RePEc:ecb:ecbart:2020:0001:2
    Note: 483719
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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/articles/2020/html/ecb.ebart202001_02~4b66d511a2.en.html
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    Citations

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    Cited by:

    1. Sander Lammers & Massimo Giuliodori & Robert Schmitz & Adam Elbourne, 2023. "Bank Funding, SME lending and Risk Taking," CPB Discussion Paper 447, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Beau Soederhuizen & Bert van Stiphout-Kramer & Harro van Heuvelen & Rob Luginbuhl, 2021. "Optimal capital ratios for banks in the euro area," CPB Discussion Paper 429, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item

    Keywords

    Bank lending; monetary policy;

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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