Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284406 
Year of Publication: 
2024
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 05/2024
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We show that the transmission of the European Central Bank's (ECB) recent monetary policy tightening differs across banks depending on their level of excess reserves. Specifically, the net worth of reserve-rich banks may display a boost when the interest rate paid on reserves increases strongly. Focusing on the ECB's 2022 rate hiking cycle, we show that reserve-rich banks' credit supply is less sensitive to the monetary policy tightening compared to other banks. The effect varies in the cross-section of both banks and firms. The results are binding at the firm level, indicating the presence of real effects.
Subjects: 
interest rates
bank lending
excess liquidity
monetary policy
JEL: 
E43
E44
E52
G21
ISBN: 
978-3-95729-974-1
Document Type: 
Working Paper

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