The ECB's QE and Euro Cross-Border Bank Lending

15 Pages Posted: 5 Oct 2016

See all articles by Stefan Avdjiev

Stefan Avdjiev

Bank for International Settlements (BIS)

Agne Subelyte

Bank for International Settlements (BIS)

Előd Takáts

Bank for International Settlements (BIS)

Date Written: September 18, 2016

Abstract

There is growing evidence that the currency distribution of cross-border credit affects international monetary policy spillovers. While the existing literature has concentrated primarily on the US dollar, this article focuses on the euro. We find that the ECB's quantitative easing of January 2015 had a larger positive impact on cross-border bank credit in lender-borrower pairs with a higher share of euro-denominated bank claims. The effect was especially pronounced for lending to advanced economies outside the euro area. By contrast, the estimated effects on cross-border lending to EME borrowers were insignificant.

JEL Classification: F34, G15, G21

Suggested Citation

Avdjiev, Stefan and Subelyte, Agne and Takáts, Előd, The ECB's QE and Euro Cross-Border Bank Lending (September 18, 2016). BIS Quarterly Review September 2016, Available at SSRN: https://ssrn.com/abstract=2842334

Stefan Avdjiev (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Agne Subelyte

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Előd Takáts

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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