This study attempts to evaluate the impact of an increase in banks' funding stress and its transmission to the real economy, taking into account different funding sources banks can rely on. Using aggregate data from eight Euro area financial systems, we find that following a liquidity funding...

Since 2008, excess liquidity - defined as the sum of holdings of central bank reserves in excess of reserve requirements and holdings of equivalent central bank deposits - has tended to accumulate in specific euro area countries and in a small, slowly changing group of credit institutions....

This paper examines the role of the precautionary demand for liquidity and the interest on reserves as two potential determinants of the deposits channel that can help explain the role of monetary policy, particularly at the near zero-bound. At high levels of precautionary liquidity hoarding the...

At present, Western European banks are increasingly branching out into asset management as well as the consulting business, which cannot be influenced directly by monetary controls. We have therefore conducted a factor analysis of banks' balance-sheet items, and we have also plotted figures from...

At present, Western European banks are increasingly branching out into asset management as well as the consulting business, which cannot be influenced directly by monetary controls. We have therefore conducted a factor analysis of banks' balance-sheet items, and we have also plotted figures from...

We study the effectiveness of central bank liquidity injections in restoring bank credit supply following a wholesale funding dry-up. We combine borrower-level data from the Italian credit registry with bank security-level holdings and analyze the transmission of the European Central Bank...

We analyze the role of loan maturity and collateral eligibility for the transmission of central bank liquidity provisions to banks following a wholesale funding dry-up. We analyze the transmission of the three-year LTRO—which substantially extended the ECB liquidity maturity—in Italy, where...

This paper studies the implication of banks' money creation and liquidity management for monetary policy. When borrowing fiat money banks use a government bond as collateral, which pays a fixed stream of nominal dividend. A variation in fiat money's quantity alters its unit real value, thereby...

This paper examines the role of precautionary liquidity (reserves) and the interest on reserves as two potential determinants of the deposits channel that can help explain the role of monetary policy, particularly at the near zero-bound. Through the deposits channel either of these two...