Philip R. Lane: The banking channel of monetary policy
Retrieved on:
Friday, February 16, 2024
Online, BSI, Specialization, BLS, Exercise, House, History, AnaCredit, NFPS, Policy, Imir, NII, ECB, T3, BVAR, CES, Housing, Composite, SHSS, Bank, Outlook, IRB, Eurozone, Total, Level, IBoxx, Supervision, Inventory, Deutsche Bundesbank, MFI, Universal, T2, Business, MIR, IHS Markit, Excess, QSA, Florence School, Insurance, Eurosystem, Household, G-SIB, Lombard, T+2, Observation, Rubric, Credit, ILM, Fused quartz
for rates, credit growth in deviation from the start of the cycle (t) in p.p.
Key Points:
- 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.