Abundant Liquidity and Bank Lending Activity: An Assessment of the Risks

Andrew Hughes Hallett, Addilyn Chams-Eddine

Research output: Working paperResearch

Abstract

This paper assesses the risks facing the euro area banking system, as it returns to normal financial conditions without ECB support. In the first part we argue that risks to bank lending mainly stem from the transmission of external monetary policy effects that may not be aligned with ECB policies. The second part of the paper therefore offers some ideas on the need to moderate spillover effects from outside monetary policies or events. We also review how far new prudential policies, regulatory measures and/or policies can be used to mitigate those unfavourable risks.
This paper assesses the risks facing the euro area banking system, as it returns to normal financial conditions without ECB support. In the first part we argue that risks to bank lending mainly stem from the transmission of external monetary policy effects that may not be aligned with ECB policies. The second part of the paper therefore offers some ideas on the need to moderate spillover effects from outside monetary policies or events. We also review how far new prudential policies, regulatory measures and/or policies can be used to mitigate those unfavourable risks.
LanguageEnglish
Place of PublicationLuxembourg
PublisherPublications Office of the European Union
Number of pages25
ISBN (Print)9789284638154
ISBN (Electronic)9789284638161
DOIs
StatePublished - Sep 2018
SeriesMonetary Dialogue

Cite this

Hallett, A. H., & Chams-Eddine, A. (2018). Abundant Liquidity and Bank Lending Activity: An Assessment of the Risks. Luxembourg: Publications Office of the European Union. Monetary Dialogue, DOI: 10.2861/772891
Hallett, Andrew Hughes ; Chams-Eddine, Addilyn. / Abundant Liquidity and Bank Lending Activity : An Assessment of the Risks. Luxembourg : Publications Office of the European Union, 2018. (Monetary Dialogue).
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Hallett, AH & Chams-Eddine, A 2018 'Abundant Liquidity and Bank Lending Activity: An Assessment of the Risks' Publications Office of the European Union, Luxembourg. DOI: 10.2861/772891

Abundant Liquidity and Bank Lending Activity : An Assessment of the Risks. / Hallett, Andrew Hughes ; Chams-Eddine, Addilyn.

Luxembourg : Publications Office of the European Union, 2018.

Research output: Working paperResearch

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Hallett AH, Chams-Eddine A. Abundant Liquidity and Bank Lending Activity: An Assessment of the Risks. Luxembourg: Publications Office of the European Union. 2018 Sep. Available from, DOI: 10.2861/772891