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One size may not fit all: Financial fragmentation and European monetary policies

Abstract : This article investigates the impact of European Central Bank policies on credits considering financial and banking fragmentation. Using European data from the past decade, we estimate SVAR models to analyze the regional impact of conventional and unconventional measures on price and volume indicators of fragmentation. The risk-taking channel is studied using GVAR models to document the national consequences of this fragmentation. We find that unconventional measures increase credit in peripheral countries. Monetary policies alleviate fragmentation, but mostly in terms of price dispersion rather than credit volume. Finally, unconventional measures imply a rebalancing of European bank assets in favor of foreign currency denominated-assets.
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https://hal-amu.archives-ouvertes.fr/hal-03777950
Contributor : Elisabeth Lhuillier Connect in order to contact the contributor
Submitted on : Thursday, September 15, 2022 - 11:24:39 AM
Last modification on : Saturday, September 17, 2022 - 3:44:01 AM

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Marie‐hélène Gagnon, Céline Gimet. One size may not fit all: Financial fragmentation and European monetary policies. Review of International Economics, In press, ⟨10.1111/roie.12627⟩. ⟨hal-03777950⟩

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