Bank lending, liquidity regulation and unconventional monetary policies in the Eurozone(joint with Laura Chiaramonte and Doriana Cucinelli)

Barbara Casu (Bayes Business School)

“Using an extensive bank-level dataset with quarterly data, we evaluate the impact of liquidity regulation and unconventional monetary policies on Eurozone banks’ lending. We find that the introduction of the Net Stable Funding Ratio (NSFR) did not affect total bank lending but caused a reduction in long-term lending and an increase in short-term lending. This maturity swap effect is in line with the aim of the NSFR to reduce the maturity transformation risk. Our analysis also reveals a positive effects of the European Central Bank’s (ECB) Longer-Term Refinancing Operations (LTROs) on banks’ medium- and long-term lending and a weak positive effect of the Targeted Longer-Term Refinancing Operations (TLTROs) on total lending.. Finally, we find that the ECB’s refinancing programmes (LTROs and TLTROs) mitigate the impact of the introduction of the NSFR on banks' lending.”

About the speaker:

Barbara is a Professor of Banking and Finance as well as the Director of Centre for Banking Research at Bayes Business School, City University of London. Her main research interests are in financial regulation, structured finance, financial innovation, and corporate governance, with a focus on the European banking sector.