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The monetary transmission mechanism in France: effects of the policy interest rate on bank interest rates and credit conditions

Author

Listed:
  • Paul Hubert

    (L'Observatoire francais des conjonctures economiques (OFCE))

  • Mathilde Viennot

    (Ecole Normale Superieure de Cachan (ENS Cachan))

Abstract

This paper analyses the monetary transmission mechanism for France over the period 1999-2012 through two of its main channels: the interest rate channel and the bank lending channel. It also focuses on the impact of the recent financial crisis on the pass-through to interest rates and credit volumes. The effect of a change in the interest rates set by the European Central bank is positive and significant for money market rates, government debt rates and lending rates to non-financial corporations, implying that the interest rate channel is quite strong in France, especially in the short-term (the effect is weaker for rates with a maturity over 2 years); the pass-through to credit volumes seems to be non-significant.

Suggested Citation

  • Paul Hubert & Mathilde Viennot, 2013. "The monetary transmission mechanism in France: effects of the policy interest rate on bank interest rates and credit conditions," Working papers wpaper17, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    • Handle: RePEc:fes:wpaper:wpaper17
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    Citations

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    Cited by:

    1. Gabriele Tondl, 2016. "Interest rates, corporate lending and growth in the Euro Area," Department of Economics Working Papers wuwp227, Vienna University of Economics and Business, Department of Economics.

    More about this item

    Keywords

    monetary transmission mechanism; interest rate channel; bank lending channel; financial crisis;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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