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Lending effects of the ECB’s asset purchases

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  • Koetter, Michael

Abstract

Between 2010 and 2012, the European Central Bank absorbed €218 billion worth of government securities from five EMU countries under the Securities Markets Programme (SMP). Detailed security holdings data at the bank level affirms an effective lending stimulus due to the SMP. Exposed banks contract household lending, but increase commercial lending substantially. Holding non-SMP securities from stressed EMU countries amplifies the commercial lending response. The SMP also improved liquidity buffers and profitability without compromising credit quality.

Suggested Citation

  • Koetter, Michael, 2020. "Lending effects of the ECB’s asset purchases," Journal of Monetary Economics, Elsevier, vol. 116(C), pages 39-52.
    • Handle: RePEc:eee:moneco:v:116:y:2020:i:c:p:39-52
    DOI: 10.1016/j.jmoneco.2019.08.019
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    2. Kirsten Schmidt & Felix Noth & Lena Tonzer, 2022. "A Note of Caution on Quantifying Banks' Recapitalization Effects," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(4), pages 1123-1133, June.
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    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • 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
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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