Mortgage Lending, Monetary Policy, and Prudential Measures in Small Euro-Area Economies: Evidence from Ireland and the Netherlands

50 Pages Posted: 6 Dec 2019

See all articles by Mary Everett

Mary Everett

Central Bank of Ireland

Jakob de Haan

University of Groningen - Faculty of Economics and Business; De Nederlandsche Bank; CESifo (Center for Economic Studies and Ifo Institute)

David-Jan Jansen

De Nederlandsche Bank ; Vrije Universiteit Amsterdam, School of Business and Economics

Peter McQuade

European Central Bank (ECB)

Anna SamarIna

De Nederlandsche Bank

Date Written: November 25, 2019

Abstract

This paper examines whether the increased use of macroprudential policies since the global financial crisis has affected the impact of (euro area and foreign) monetary policy on mortgage lending in Ireland and the Netherlands, which are both small open economies in the euro area. Using bank-level data on domestic lending in both countries during the period 2003-2018, we find that restrictive euro area monetary policy shocks reduce the growth of mortgage lending. We find evidence that stricter domestic prudential regulation mitigates this effect in Ireland, but not so in the Netherlands. There is weak evidence for an international bank lending channel.

Keywords: monetary policy, prudential policy, mortgage lending, European monetary union

JEL Classification: G21, E42, F36

Suggested Citation

Everett, Mary and de Haan, Jakob and de Haan, Jakob and Jansen, David-Jan and McQuade, Peter and SamarIna, Anna, Mortgage Lending, Monetary Policy, and Prudential Measures in Small Euro-Area Economies: Evidence from Ireland and the Netherlands (November 25, 2019). De Nederlandsche Bank Working Paper No. 659, 2019, Available at SSRN: https://ssrn.com/abstract=3498309 or http://dx.doi.org/10.2139/ssrn.3498309

Mary Everett (Contact Author)

Central Bank of Ireland ( email )

P.O. Box 559
Dame Street
Dublin, 2
Ireland

Jakob De Haan

University of Groningen - Faculty of Economics and Business ( email )

PO Box 800
Groningen, 9700 AV
Netherlands
+31 0 50 3633706 (Fax)

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

David-Jan Jansen

De Nederlandsche Bank ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

HOME PAGE: http://sites.google.com/site/djansenresearch

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Peter McQuade

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Anna SamarIna

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

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