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The Financial Accelerator in Europe after the Financial Crisis

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  • Klára Baková

    () (Mendel University in Brno, Czech Republic)

Abstract

This paper investigates the mechanism of a financial accelerator. In particular, it examines the procyclicality of credit margins in Europe after the financial crisis, with an additional split into small, medium and large-sized banks. The empirical analysis is in contrast with contemporary authors because it approves that the financial accelerator is not present on the European market after the financial crisis. It could be caused by multiple factors, for example structural changes during the financial crisis, a change in the behaviour of commercial banks or extremely low interest rates. We tested our hypothesis on a dataset that consists of a data panel with annual data for the period 1998–2015 and includes 2,489 banks from 36 European countries from the Bankscope database. We also provide robust empirical proof that such behaviour was not occurring during the financial crisis or after the financial crisis in the European banking system.

Suggested Citation

  • Klára Baková, 2018. "The Financial Accelerator in Europe after the Financial Crisis," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 4(2), pages 143-155, December.
  • Handle: RePEc:men:journl:v:4:y:2018:i:2:p:143-155
    DOI: https://doi.org/10.11118/ejobsat.v4i2.136
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    File URL: https://journal.ejobsat.cz/index.php/ejobsat/article/view/136/162
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    References listed on IDEAS

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    More about this item

    Keywords

    credit cycle; financial accelerator; interest margin;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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