The Effects of the Eurosystem's App on Euro Area Bank Lending: Letting Different Data Speak

45 Pages Posted: 22 Apr 2019

See all articles by Barno Blaes

Barno Blaes

Deutsche Bundesbank

Björn Kraaz


Christian Offermanns

Goethe University Frankfurt

Date Written: 2019


We study the implications of the Eurosystem's expanded Asset Purchase Programme (APP) for the bank lending business of euro area banks with euro area non-financial corporations (NFCs) using microeconometric matching techniques. Based on confidential bank-level data on quantitative balance sheet items and interest rates as well as on qualitative survey responses to the Eurosystem's Bank Lending Survey, we identify the exposure of banks to the APP and corresponding effects on loan growth. We find that the APP was effective in stimulating the lending activity with NFCs for a subset of relatively sound banks. At the same time, our results show that there is a non-negligible number of banks with less healthy balance sheets which could not transfer the APP stimulus into more lending. Instead, such banks appear to have used the APP stimulus for consolidating their balance sheets, thereby also reducing their lending business with NFCs. This confirms the importance of accounting for the large degree of heterogeneity in the euro area banking sector in analyses of the effectiveness of monetary policy measures.

Keywords: lending to non-financial corporations, bank-level data, bank heterogeneity, unconventional monetary policy, treatment effects, regression-adjusted matching

JEL Classification: E52, G21, C21

Suggested Citation

Blaes, Barno and Kraaz, Björn and Offermanns, Christian, The Effects of the Eurosystem's App on Euro Area Bank Lending: Letting Different Data Speak (2019). Deutsche Bundesbank Discussion Paper No. 26/2019. Available at SSRN:

Barno Blaes (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431

Björn Kraaz


No Address Available

Christian Offermanns

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323

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