Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/269145 
Year of Publication: 
2022
Series/Report no.: 
ECB Working Paper No. 2738
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We investigate banks' benefits and costs of having access to LOLR. Integrating novel data sets we estimate the borrowing capacities of euro area banks at the ECB. Controlling for ratings, we find that banks with more fragile funding are likely to borrow more from the ECB during the great financial and euro area sovereign debt crises. We develop a dynamic model of a bank and calibrate it to our empirical estimates. A bank with access to LOLR has higher equity value and makes larger investments in new loans, but it is more leveraged, pays more dividends and issues less equity.
Subjects: 
LOLR
Collateral
Haircut
Borrowing Capacity
Liquidity
JEL: 
G2
E5
E58
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-5386-3
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.