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Bank risks and lending outcomes: Evidence from QE

Author

Listed:
  • Sclip, Alex
  • Girardone, Claudia
  • Beltrame, Federico
  • Paltrinieri, Andrea
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.

Suggested Citation

  • Sclip, Alex & Girardone, Claudia & Beltrame, Federico & Paltrinieri, Andrea, 2021. "Bank risks and lending outcomes: Evidence from QE," Journal of International Money and Finance, Elsevier, vol. 118(C).
  • Handle: RePEc:eee:jimfin:v:118:y:2021:i:c:s0261560621001261
    DOI: 10.1016/j.jimonfin.2021.102475
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    References listed on IDEAS

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    Cited by:

    1. Anani, Makafui & Owusu, Felix, 2023. "Regulatory capital and bank risk-resilience amid the Covid-19 pandemic: How are the Basel reforms faring?," Finance Research Letters, Elsevier, vol. 52(C).

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    More about this item

    Keywords

    Bank risks; Lending; Monetary policy; Large scale asset purchases; Quantitative easing; Federal reserve;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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