Bank Lending Margins In The Euro Area
DOWNLOAD
Download Bank Lending Margins In The Euro Area PDF/ePub or read online books in Mobi eBooks. Click Download or Read Online button to get Bank Lending Margins In The Euro Area book now. This website allows unlimited access to, at the time of writing, more than 1.5 million titles, including hundreds of thousands of titles in various foreign languages. If the content not found or just blank you must refresh this page
Bank Lending Margins In The Euro Area
DOWNLOAD
Author : Helen Louri
language : en
Publisher:
Release Date : 2016
Bank Lending Margins In The Euro Area written by Helen Louri and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
In the present paper we study the determinants of the margins paid by euro-area non-financial corporations (NFCs) for their bank loans on top of the rates they earn for their deposits (bank lending margins). We use panel VAR techniques, in order to test for causality relationships and produce impulse response functions for eleven euro-area countries from 2003:1 to 2014:12. The countries are separated into two groups (distressed and non-distressed), in order to examine for heterogeneities in the relationships between lending margins; the period is also separated with reference to the peak of the global financial crisis (before and after the collapse of Lehman in September 2008). We find that significant heterogeneities existed even before the global financial crisis and remained in its aftermath, although the magnitude and the direction of the effects exercised by the explanatory variables have changed. Furthermore, apart from finding that market concentration and the prudence of banks' management increase the lending margins NFCs pay for their loans, there is evidence of substitution effects between financing obtained from banks and corporate bond markets. The provision of ample liquidity from the ECB, in the aftermath of the global financial crisis was found to be effective only for the core countries, suggesting that further policy actions are needed in order to reduce the fragmentation of bank lending and promote financial integration to the benefit of the euro-area real economy.
Effectiveness And Channels Of Macroprudential Instruments
DOWNLOAD
Author : Mr.Thierry Tressel
language : en
Publisher: International Monetary Fund
Release Date : 2016-01-12
Effectiveness And Channels Of Macroprudential Instruments written by Mr.Thierry Tressel and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-01-12 with Business & Economics categories.
The crisis has highlighted the importance of setting up macro-prudential oversight frameworks, having effective macro-prudential instruments in place to be called upon to mitigate growing financial imbalances as needed. We develop a new approach using the euro area Bank Lending Survey to assess the effectiveness of macro-prudential policies in containing credit growth and house price appreciation in mortgage markets. We find instruments targeting the cost of bank capital most effective in slowing down mortgage credit growth, and that the impact is transmitted mainly through price margins, the same banking channel as monetary policy. Limits on loan-to-value ratios are also effective, especially when monetary policy is excessively loose.
Implications Of Negative Interest Rates For The Net Interest Margin And Lending Of Euro Area Banks
DOWNLOAD
Author : Melanie Klein
language : en
Publisher:
Release Date : 2020
Implications Of Negative Interest Rates For The Net Interest Margin And Lending Of Euro Area Banks written by Melanie Klein and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
This paper explores the impact of low (but) positive and negative market interest rates on euro area banks' net interest margin (NIM) and its components, retail lending and retail deposit rates. Using two proprietary bank-level data sets, I find a positive impact of the level of the short-term rate on the NIM, which increases substantially at negative market rates. As low profitability could hamper the ability of banks to expand lending, I also investigate the impact of the NIM on new lending to the non-financial private sector. In general, the NIM is positively related to lending: When lending is less profitable, banks cut lending. However, at negative rates this effect vanishes. This finding suggests that banks adjusted their business practices when servicing new loans, thereby contributing to higher new lending in the euro area since 2014.
Determinants Of Net Interest Margins Are Banks Equally Affeced By Negative Interest Policy Rates
DOWNLOAD
Author : Valentin Stockerl
language : en
Publisher: GRIN Verlag
Release Date : 2019-03-25
Determinants Of Net Interest Margins Are Banks Equally Affeced By Negative Interest Policy Rates written by Valentin Stockerl and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-03-25 with Business & Economics categories.
Seminar paper from the year 2019 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,0, University of Frankfurt (Main), course: Inspecting the European Banking Sector, language: English, abstract: In the novel monetary environment of negative interest policy rates (NIPR) in the Euro area, it is questionable whether the existing findings on determinants of Net Interest Margins (NIM) still hold. This paper analyzes differences in the development of NIM across business models represented by a set of three indicators prior to and after the introduction of NIPR. The strategies are based on a binary categorization between high and low levels of the business indicators using a median, 67-33 and 80-20 percentile cut-off rule. I use a difference in differences (DiD) estimation approach, even though NIPR impact all banks’ NIM. Thus, the obtained estimates do not measure the impact of NIPR itself, but the DiD between strategies. I mostly find positive albeit insignificant effects on banks with low asset held for trading, high deposit and customer loan ratios. In contrast, the DiD coefficient for banks with high deposit-based financing using an 80-20 cut-off is -14 bp, which proves to be a highly significant and economically relevant. These findings support the notion that multiple channels are affecting banks’ NIM.
Negative Interest Rate Policy Nirp
DOWNLOAD
Author : Andreas Jobst
language : en
Publisher: International Monetary Fund
Release Date : 2016-08-10
Negative Interest Rate Policy Nirp written by Andreas Jobst and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-08-10 with Business & Economics categories.
More than two years ago the European Central Bank (ECB) adopted a negative interest rate policy (NIRP) to achieve its price stability objective. Negative interest rates have so far supported easier financial conditions and contributed to a modest expansion in credit, demonstrating that the zero lower bound is less binding than previously thought. However, interest rate cuts also weigh on bank profitability. Substantial rate cuts may at some point outweigh the benefits from higher asset values and stronger aggregate demand. Further monetary accommodation may need to rely more on credit easing and an expansion of the ECB’s balance sheet rather than substantial additional reductions in the policy rate.
The Risk Taking Channel Of Monetary Policy Transmission In The Euro Area
DOWNLOAD
Author : Matthias Neuenkirch
language : en
Publisher:
Release Date : 2018
The Risk Taking Channel Of Monetary Policy Transmission In The Euro Area written by Matthias Neuenkirch and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
In this paper, we provide evidence for a risk-taking channel of monetary policy transmission in the euro area that works through the relaxation of lending standards for borrowers. Our dataset covers the period 2003Q1-2016Q2 and includes, in addition to the standard variables for real GDP growth, inflation, and the monetary policy stance, indicators of bank lending standards and bank lending margins. Based on vector autoregressive models with (i) recursive identification and (ii) sign restrictions, we show that banks react aggressively to an expansionary monetary policy shock by lowering their lending standards. The banks' efforts to keep their lending margin stable, however, are not successful as we detect a significant compression. We document these findings for the euro area as a whole and for its individual member states. In particular, banks in the Netherlands, Portugal, Spain, and Ireland lowered their lending standards after expansionary monetary policy shocks. The compression of the lending margin is most pronounced in the five crisis countries (Greece, Ireland, Italy, Portugal, and Spain).
Fragmentation And Monetary Policy In The Euro Area
DOWNLOAD
Author : Mr.Ali J Al-Eyd
language : en
Publisher: International Monetary Fund
Release Date : 2013-10-04
Fragmentation And Monetary Policy In The Euro Area written by Mr.Ali J Al-Eyd and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-10-04 with Business & Economics categories.
The ECB has taken a range of actions to address bank funding problems, eliminate excessive risk in sovereign markets, and safeguard monetary transmission. But euro area financial markets have remained fragmented, driving retail interest rates in stressed markets far above those in the core. This has impeded the flow of credit and undermined the transmission of monetary policy. Analysis presented here indicates that the credit channel of monetary policy has broken down during the crisis, particularly in stressed markets, and that SMEs in these economies appear to be most affected by elevated lending rates.Given these stresses, the ECB can undertake additional targeted policy measures, including through additional term loans, collateral policies, and private asset purchases.
Breaking The Bank A Probabilistic Assessment Of Euro Area Bank Profitability
DOWNLOAD
Author : Selim Elekdag
language : en
Publisher: International Monetary Fund
Release Date : 2019-11-22
Breaking The Bank A Probabilistic Assessment Of Euro Area Bank Profitability written by Selim Elekdag and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-11-22 with Business & Economics categories.
This paper explores the determinants of profitability across large euro area banks using a novel approach based on conditional profitability distributions. Real GDP growth and the NPL ratio are shown to be the most reliable determinants of bank profitability. However, the estimated conditional distributions reveal that, while higher growth would raise profits on average, a large swath of banks would most likely continue to struggle even amid a strong economic recovery. Therefore, for some banks, a determined reduction in NPLs combined with cost efficiency improvements and customized changes to their business models appears to be the most promising strategy for durably raising profitability.
Banking In Europe
DOWNLOAD
Author : Mariarosa Borroni
language : en
Publisher: Springer
Release Date : 2019-04-09
Banking In Europe written by Mariarosa Borroni and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-04-09 with Business & Economics categories.
This Palgrave Pivot provides a comprehensive overview of the dynamics that are affecting the profitability of European banks since the recent crisis period. More specifically, it sheds light on the most crucial changes in profit generation and on the consequential changes in banking strategies due to fiercer competition, reduced margin and changing regulation. The work is divided in four main parts. The first section introduces the changes in bank management policies, considering the periods before and since the crisis. In the second section, the authors review the literature on bank profitability and outline the main determinants of profit generation, and in the third section they provide a cross-country analysis of profitability for a wide sample of European banks during the great financial crisis. In the last section, the authors discuss the results of the quantitative analysis under the new regulatory and competitive framework that is progressively affecting the banking sector (fintech, Basel regulations, etc.). This book will be of interest to academics, researchers and students of European banking.
Euro Area Policies
DOWNLOAD
Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2018-07-19
Euro Area Policies written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-07-19 with Business & Economics categories.
The FSAP team undertook a thorough top-down stress testing analysis using end-2017 data. This note covers the methodology and results of the scenario-based solvency tests, the single factor sensitivity tests, and the liquidity tests. The stress test exercise was carried out on a sample of major euro area banks supervised by the Single Supervisory Mechanism (SSM). The analysis is heavily dependent on comprehensive and granular supervisory data on individual banks’ positions shared by the European Central Bank (ECB). While FSAP results are not directly comparable to the 2018 EU-wide stress test results due to differences in scenarios, methodologies, and objectives, they provide an assessment of the system-wide resilience of the euro area banking sector at the current juncture.