This paper studies the macroeconomic relevance of credit channels of monetary policy by examining the impact of the external finance premium (EFP), that may vary over the business cycle, on private consumption in Europe. A consumption model incorporates credit channels by assuming that...

Empirical results for the United States show that the credit risk premium leads the stock market by up to four weeks. They are robust across different stock market measures, empirical methods and sample periods. The finding of a flight to quality that first occurs in the corporate bond and...

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,...

This study examines the macroeconomic determinants of corporate debt securities in the euro area. The financing costs, as approximated by the cost of debt securities vis-a-vis other sources of corporate finance, and financing needs, as captured by mergers and acquisitions and gross domestic...

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...

Regression results show that the external financing costs, the financing gap and profit expectations significantly matter for US and euro area aggregate (nonconstruction) investment. This finding supports the view that external and internal financing constraints hamper investment also at the...