Philip R. Lane: The banking channel of monetary policy
for rates, credit growth in deviation from the start of the cycle (t) in p.p.
- for rates, credit growth in deviation from the start of the cycle (t) in p.p.
- Starting months correspond to the month immediately preceding the first hike or explicit announcement of the hike of the cycle.
- The dotted lines shows counterfactuals for lending rates and lending volumes, taking December 2021 as the last observation and
projecting volumes conditional on the path of monetary policy rates. - The one for lending volumes is based on the BVAR model in Altavilla,
Giannone, and Lenza (2016). - Composite funding costs are a weighted average of deposit rates
and average monthly bond yields, with outstanding amounts as weights. - Right chart shows
the contributions of the components to the change in the composite bank funding cost
between December 2021 and November 2023. - Latest observations: 8 February 2024 for bond yields; December 2023 for other series.
- Notes: ?Others? include shares (listed and not listed as well as those issued by investment
funds), and insurance and pension schemes. - Retail
Specialised
Universal
10
10
8
8
6
6
4
4
2
2
0
0
-2
-2
-4
Jan-20 Aug-20 Mar-21 Oct-21 May-22 Dec-22 Jul-23-4
Sources: ECB (iBSI, iMIR) MPC Task Force on Banking Analysis and ECB calculations.
- Investment refers to the net
change in property plant and equipment over assets; cash refers to cash and cash
equivalents over assets. - Households
loans, credit standards and loan demand
Rubric
Changes in credit standards for
loans to households, and
contributing factors
(net percentage)0
30
-40
20
Sources: ECB (BSI) and ECB calculations.
- Low-income households are those in the bottom 20 per cent
of the income distribution; high-income households are those in the top 20 per cent.