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Monetary Policy and Corporate Debt Structure

Author

Listed:
  • Stéphane Lhuissier

    (Banque de France - Banque de France - Banque de France)

  • Urszula Szczerbowicz

    (Banque de France - Banque de France - Banque de France)

Abstract

This paper evaluates and compares the effects of conventional and unconventional monetary policies on the corporate debt structure in the United States. It does so by using a vector autoregression in which policy shocks are identified through high‐frequency external instruments. Our results show that both monetary policies shift the firms' composition of external financing, though in a different way. An expansionary conventional (unconventional) monetary policy leads to a rise (decline) in loans and a decline (rise) in debt securities issuance. Our results suggest that unconventional monetary policy operated primarily through a portfolio rebalancing channel, rather than through a bank lending channel.

Suggested Citation

  • Stéphane Lhuissier & Urszula Szczerbowicz, 2022. "Monetary Policy and Corporate Debt Structure," Post-Print hal-04459541, HAL.
    • Handle: RePEc:hal:journl:hal-04459541
    DOI: 10.1111/obes.12443
    as

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    Citations

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    Cited by:

    1. Darmouni, Olivier & Geisecke, Oliver & Rodnyanky, Alexander, 2019. "The Bond Lending Channel of Monetary Policy," MPRA Paper 95141, University Library of Munich, Germany.
    2. Cappiello, Lorenzo & Holm-Hadulla, Fédéric & Maddaloni, Angela & Mayordomo, Sergio & Unger, Robert & Arts, Laura & Meme, Nicolas & Asimakopoulos, Ioannis & Migiakis, Petros & Behrens, Caterina & Moura, 2021. "Non-bank financial intermediation in the euro area: implications for monetary policy transmission and key vulnerabilities," Occasional Paper Series 270, European Central Bank.
    3. Mertzanis, Charilaos, 2024. "Central bank policies and green bond issuance on a global scale," Energy Economics, Elsevier, vol. 133(C).
    4. Holm-Hadulla, Fédéric & Thürwächter, Claire, 2021. "Heterogeneity in corporate debt structures and the transmission of monetary policy," European Economic Review, Elsevier, vol. 136(C).
    5. Anh Nguyet Vu, 2025. "The impact of conventional and unconventional monetary policies on loan default risk—Evidence from UK peer‐to‐peer lending platforms," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 242-260, January.
    6. Chen, Hsuan-Chi & Chou, Robin K. & Lin, Chih-Yung & Lu, Chien-Lin, 2025. "Too big to fail? Asymmetric effects of quantitative easing," Journal of Financial Stability, Elsevier, vol. 77(C).
    7. Darmouni, Olivier & Siani, Kerry Y., 2025. "Bond market stimulus: Firm-level evidence," Journal of Monetary Economics, Elsevier, vol. 151(C).
    8. Darmouni, Olivier & Papoutsi, Melina, 2022. "Non-bank lending to mid-size firms in Europe: evidence from corporate securities," Working Paper Series 2663, European Central Bank.
    9. Chen, Wanyi & Xu, Jingyu, 2024. "Can digital tax enforcement reduce the risk of corporate debt default?," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 1041-1060.
    10. Pejman Peykani & Mostafa Sargolzaei & Amir Takaloo & Shahla Valizadeh, 2023. "The Effects of Monetary Policy on Macroeconomic Variables through Credit and Balance Sheet Channels: A Dynamic Stochastic General Equilibrium Approach," Sustainability, MDPI, vol. 15(5), pages 1-21, March.
    11. Stéphane Lhuissier & Benoit Nguyen, 2021. "The Dynamic Effects of the ECB s Asset Purchases: a Survey-Based Identification," Working papers 806, Banque de France.

    More about this item

    JEL classification:

    • 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
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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