A Capital Structure Channel of Monetary Policy

Benjamin Grosse-Rueschkamp, Sascha Steffen, Daniel Streitz

Publikation: KonferencebidragPaperForskningpeer review

Abstrakt

We study the transmission channels from central banks’ quantitative easing programs via the banking sector when central banks start purchasing corporate bonds. We find evidence consistent with a “capital structure channel” of monetary policy. The announcement of central bank purchases reduces the bond yields of firms whose bonds are eligible for central bank purchases. These firms substitute bank term loans with bond debt, thereby relaxing banks’ lending constraints: banks with low Tier-1 ratios and high non-performing loans increase lending to private (and profitable) firms, which experience a growth in capital expenditures and sales. The credit reallocation increases banks’ risk-taking in corporate credit.
OriginalsprogEngelsk
Publikationsdato18 sep. 2018
Antal sider66
DOI
StatusUdgivet - 18 sep. 2018
Begivenhed25th Annual Meeting of the German Finance Association. DGF 2018 - Universität Trier, Trier, Tyskland
Varighed: 21 sep. 201822 sep. 2018
Konferencens nummer: 25
https://www.uni-trier.de/index.php?id=65393

Konference

Konference25th Annual Meeting of the German Finance Association. DGF 2018
Nummer25
LokationUniversität Trier
LandTyskland
ByTrier
Periode21/09/201822/09/2018
Internetadresse

Emneord

  • Debt capital structure
  • Bond debt
  • Unconventional monetary policy
  • CSPP
  • Real effects

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