QE and the Bank Lending Channel in the United Kingdom

Nick Buttz, Rohan Churmz, Michael McMahon, Arpad Morotzz and Jochen Schanz

No 270021, Economic Research Papers from University of Warwick - Department of Economics

Abstract: We test whether quantitative easing (QE), in addition to boosting aggregate demand and inflation via portfolio rebalancing channels, operated through a bank lending channel (BLC) in the UK. Using Bank of England data together with an instrumental variables approach, we find no evidence of a traditional BLC associated with QE. We show, in a simple framework, that the traditional BLC is diminished if the bank receives ‘flighty’ deposits (deposits that are likely to quickly leave the bank). We show that QE gave rise to such flighty deposits which may explain why we find no evidence of a BLC.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 40
Date: 2015-10-10
References: Add references at CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the bank lending channel in the United Kingdom (2015)
Working Paper: QE and the Bank Lending Channel in the United Kingdom (2015)
Working Paper: QE and the bank lending channel in the United Kingdom (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:270021

DOI: 10.22004/ag.econ.270021

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