Bank risks and lending outcomes: Evidence from QE

Alex Sclip; Claudia Girardone; Federico Beltrame; Andrea Paltrinieri

doi:10.1016/j.jimonfin.2021.102475

Bank risks and lending outcomes: Evidence from QE

Alex Sclip, Claudia Girardone, Federico Beltrame, Andrea Paltrinieri

Research output: Contribution to journal › Article

Abstract

This paper investigates the impact of bank risk positions on their lending outcomes during quantitative easing (QE) interventions. We find that after the first and second round of QE, banks with lower default probabilities expand lending more in comparison to their risky counterparts. However, differences were no longer relevant in the third round of QE, which occurred at a time when the banking sector health was improved relative to QE1. Our findings suggest that bank riskiness is important for the transmission of unconventional monetary policy interventions.

Original language	English
Pages (from-to)	1-10
Number of pages	10
Journal	Journal of International Money and Finance
DOIs	https://doi.org/10.1016/j.jimonfin.2021.102475
Publication status	Published - 2021

Keywords

Bank risks
Federal reserve
Large scale asset purchases
Lending
Monetary policy
Quantitative easing

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10.1016/j.jimonfin.2021.102475

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title = "Bank risks and lending outcomes: Evidence from QE",

abstract = "This paper investigates the impact of bank risk positions on their lending outcomes during quantitative easing (QE) interventions. We find that after the first and second round of QE, banks with lower default probabilities expand lending more in comparison to their risky counterparts. However, differences were no longer relevant in the third round of QE, which occurred at a time when the banking sector health was improved relative to QE1. Our findings suggest that bank riskiness is important for the transmission of unconventional monetary policy interventions.",

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AU - Girardone, Claudia

AU - Beltrame, Federico

AU - Paltrinieri, Andrea

PY - 2021

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AB - This paper investigates the impact of bank risk positions on their lending outcomes during quantitative easing (QE) interventions. We find that after the first and second round of QE, banks with lower default probabilities expand lending more in comparison to their risky counterparts. However, differences were no longer relevant in the third round of QE, which occurred at a time when the banking sector health was improved relative to QE1. Our findings suggest that bank riskiness is important for the transmission of unconventional monetary policy interventions.

KW - Bank risks

KW - Federal reserve

KW - Large scale asset purchases

KW - Lending

KW - Monetary policy

KW - Quantitative easing

KW - Bank risks

KW - Federal reserve

KW - Large scale asset purchases

KW - Lending

KW - Monetary policy

KW - Quantitative easing

UR - http://hdl.handle.net/10807/187308

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JO - Journal of International Money and Finance

JF - Journal of International Money and Finance

ER -

Bank risks and lending outcomes: Evidence from QE

Abstract

Keywords

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