ECB Corporate QE and the Loan Supply to Bank-Dependent Firms
50 Pages Posted: 13 Sep 2019
Date Written: September, 2019
Using a representative sample of businesses in the euro area, we show that Eurosystempurchases of corporate bonds under the Corporate Sector Purchase programme (CSPP)increased the net issuance of debt securities, triggering a shift in bank loan supply infavour of firms that do not have access to bond-based financing. Identification comes frommatching bank-dependent firms to their lenders and accounting for the effect of CSPPon banks’ activity in the syndicated loan market. In a difference-in-differences setting,we show that credit access improved relatively more for firms borrowing from banksrelatively more exposed to CSPP-eligible firms. Unlike in previous studies, this resultapplies regardless of bank balance sheet quality as measured by Tier 1 and NPL ratios.
Keywords: corporate sector purchase programme, ECB, loan supply, Unconventional monetary policy
JEL Classification: E52, E58, G01, G21, G28
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