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The national segmentation of euro area bank balance sheets during the financial crisis

Author

Listed:
  • A. Colangelo

    () (European Central Bank
    ECARES-Université Libre de Bruxelles)

  • D. Giannone

    () (Federal Reserve Bank of New York
    CEPR)

  • M. Lenza

    () (European Central Bank
    ECARES-Université Libre de Bruxelles)

  • H. Pill

    (Goldman Sachs)

  • L. Reichlin

    () (London Business School
    CEPR)

Abstract

Abstract This paper analyses bank balance sheet data in conjunction with macroeconomic and other financial variables. Our aim is to understand the nature of the instability in financial intermediation in the euro area during the recent financial crises. We define “large changes” as significant departures in the actual evolution of balance sheet variables during the crisis from their historical association with the business and financial cycles. In the course of the global 2008–2009 financial crisis, such “large changes” were features of the behaviour of cross-border inter-bank flows, both within the euro area and between the euro area and the rest of the world. By contrast, retail assets and liabilities, as well as inter-bank flows among banks of the same country, did not significantly deviate from historical regularities. Since the euro area sovereign crisis of 2011–2012, “large changes” have been more pervasive. In particular, a significant home bias in the sovereign bond market has emerged.

Suggested Citation

  • A. Colangelo & D. Giannone & M. Lenza & H. Pill & L. Reichlin, 2017. "The national segmentation of euro area bank balance sheets during the financial crisis," Empirical Economics, Springer, vol. 53(1), pages 247-265, August.
  • Handle: RePEc:spr:empeco:v:53:y:2017:i:1:d:10.1007_s00181-016-1221-2
    DOI: 10.1007/s00181-016-1221-2
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    References listed on IDEAS

    as
    1. Reichlin, Lucrezia, 2014. "Monetary Policy and Banks in the Euro Area: The Tale of Two Crises," Journal of Macroeconomics, Elsevier, vol. 39(PB), pages 387-400.
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    Citations

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    Cited by:

    1. Caruso, Alberto & Reichlin, Lucrezia & Ricco, Giovanni, 2018. "Financial and Fiscal Interaction in the Euro Area Crisis : This Time was Different," The Warwick Economics Research Paper Series (TWERPS) 1167, University of Warwick, Department of Economics.
    2. repec:nse:ecosta:ecostat_2017_494-495-496_4 is not listed on IDEAS
    3. repec:prs:ecstat:estat_0336-1454_2017_num_494_1_10781 is not listed on IDEAS
    4. repec:prs:ecsecs:estat_0336-1454_2017_num_494_1_10781 is not listed on IDEAS

    More about this item

    Keywords

    Bank balance sheets; Non-standard monetary policy; Central banks;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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