IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-04336142.html
   My bibliography  Save this paper

The Collateral Channel of Monetary Policy

Author

Listed:
  • Anne-Laure Delatte

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique)

  • Pranav Garg

    (Yale University [New Haven])

  • Jean Imbs

    (NYUAbu Dhabi)

Abstract

We present evidence that a loosening in collateral requirements instigated by the European Central Bank in 2012 did result in an expansion of credit, with real effects on firms' investment, productivity, and dividends. This is a novel result, obtained thanks to our identification methodology. We partition banks into categories according to the pre-reform distributions of their overall loan portfolios, so that the comparison is performed between banks with different exposures to the change in collateral constraint, but otherwise similar loan portfolios. The policy has economy-wide real effects that are economically significant: Relaxing collateral constraints by one standard deviation results in an increase of 0.3σ in investment and productivity, and of 0.26σ in dividends.

Suggested Citation

  • Anne-Laure Delatte & Pranav Garg & Jean Imbs, 2023. "The Collateral Channel of Monetary Policy," Working Papers hal-04336142, HAL.
    • Handle: RePEc:hal:wpaper:hal-04336142
    Note: View the original document on HAL open archive server: https://hal.science/hal-04336142
    as

    Download full text from publisher

    File URL: https://hal.science/hal-04336142/document
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    E44 E58 G21 G32 Collateral constraints unconventional monetary policy credit supply real effects; E44; E58; G21; G32 Collateral constraints; unconventional monetary policy; credit supply; real effects;
    All these keywords.

    JEL classification:

    • 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
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • 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
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-04336142. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.