Aggregate loan development typically hinges on a combination of factors that impact simultaneously on the demand and the supply side of bank lending. The financial turmoil starting in mid-2007 had detrimental consequences for banks’ balance-sheets, cost of funds and profitability, thus...

We present a DSGE model where firms optimally choose among alternative instruments of external finance. The model is used to explain the evolving composition of corporate debt during the financial crisis of 2008-09, namely the observed shift from bank finance to bond finance, at a time when the...

This occasional paper explains why the bank lending survey was developed by the ECB and describes its main features. It discusses the importance of credit developments for both the economy and the functioning of monetary policy, and further clarifies why the survey was introduced. Furthermore,...

For central banks, the monitoring of financing conditions plays a pivotal role in assessing the actual transmission of monetary policy impulses to borrowers. This paper presents in detail some of the indicators and data used by the ECB to assess financing conditions in the euro area. It also...

We argue that in an unreliable enforcement regime, transactions tend to become intermediated through institutions or concentrated among agents bound by some form of private enforcement. Provision of funding shifts from risk capital to debt, and from markets to institutions with long term...

Our interest here concerns liquidity supply as a distinctive feature of the bank-borrower relationship. Any agent facing an opportunity or a commitment may find him/herself unexpectedly illiquid, and hence he/she may find it profitable to borrow "on call" if this costs less than missing the...

Seit der globalen Finanzmarktkrise des Jahres 2007 kam es zu einer Reihe von außergewöhnlichen liquiditätserweiternden Maßnahmen durch die Europäische Zentralbank. Ziel war und ist es, die Unsicherheit auf dem Interbankenmarkt zu reduzieren und die stockende Kreditvergabe an die...

The financial crisis drew attention to the way in which workers in certain countries had been able to sustain consumption through housing and consumer credit despite insecure labour-market positions. This indicates a need to expand the analysis of the relationship between flexibility and...

Judicial enforcement of contracts can have an effect on credit market performance because it influences the risk and costs of credit transactions. This paper documents this point by empirically investigating the relation between the efficiency of judicial systems and credit market development...

Most economic investigations of access to education treat an investment in college or university as if it were a financial investment offering a particular expected rate of return. Since the average measured rates of return are quite favourable, other factors such as lack of information,...