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David Marqués-Ibáñez

Research

Division

Financial Research

Current Position

Team Lead - Economist

Fields of interest

Financial Economics,Macroeconomics and Monetary Economics

Email

david.marques@ecb.europa.eu

Other current responsibilities
2018-2019

Coordinator Technical Paper Monetary policy and Financial Stability

2016-2018

Coordinator Research Cluster 3 "Financial stability, macroprudential regulation, and microprudential supervision"

Education
2013-2013

Visiting Scholar, Stern School of Business, New York University

2013-2013

Chazen Visiting Scholar, Columbia School of Business, Columbia University

1998-2002

Doctorate in Economics (Ph.D.). University of Wales

1996-1998

Master in Banking and Finance. University of Wales, Bangor

1996-1997

University of Florence. Postgraduate ECTS scholarship from the European Union, Italy

1991-1995

Licenciado in Economics. Universidad de Granada, Granada, Spain

Professional experience
2020-

Team Lead - Research Directorate, Financial Research Division, European Central Bank

2019-2019

Principal Economist - Research Directorate, Financial Research Division, European Central Bank

2017-2018

Senior Economist - Research Directorate, Financial Research Division, European Central Bank

2016-2016

Visiting Economist - International Monetary Fund,Research Department, Macro Finance Group, Washington, United States

2015-2016

Senior Economist - Board of Governors of the Federal Reserve, International Finance Division, Washington, United States

2014-2015

Economist - Board of Governors of the Federal Reserve, Economist, International Finance Division, Washington, United States

2014-2014

Principal Economist - Research Directorate, Financial Research Division, European Central Bank

2013-2013

Visiting Researcher - Federal Reserve Bank of New York, Financial Intermediation Research Function, New York, United States

2012-2013

Workstream coordinator - High Level Task Force for the creation of Single Supervisory Mechanism, European Central Bank

2019-2012

Senior Economist - Research Directorate, Financial Research Division, European Central Bank

2007-2007

Visiting Economist - Monetary Policy Directorate, Financial Structure Unit, Rome, Bank of Italy

2004-2007

Senior Economist - Monetary Policy Directorate, Capital Markets and Financial Structure Division, European Central Bank

2003-2005

Economist - Monetary Policy Directorate, Capital Markets and Financial Structure Division, European Central Bank

Awards
2012

ECB special award for continuous outstanding performance

2000

ICO Spanish Minister of Finance doctoral fellowship. 1998 to 2000

1999

University of Wales doctoral fellowship. 1998-2000

1998

University of Granada research scholarship

1996

European Union postgraduate ECTS scholarship

Teaching experience
2019-

International Finance (University of Rome III)

2005-2006

Empirical banking, microeconometrics

27 February 2004
WORKING PAPER SERIES - No. 313
Details
Abstract
This study empirically examines the development of the high-yield segment of the corporate bond market in the United States, as a pioneer country, and the United Kingdom and the euro area, as later adopting countries. Estimated diffusion models show for the United States a significant pioneer influence factor and autonomous speed of diffusion. The latter is found to be higher in Europe than in the United States as also macroeconomic factors are considered. The high-yield bond diffusion pattern is significantly affected by financing need variables, e.g. leverage buy-outs, mergers and acquisitions, and industrial production growth, and return or financing cost variables, e.g. stock market return and the spread between the yield on speculative-grade and BBB-rated investment-grade bonds. These findings suggest that the diffusion of new financial products depends on the macroeconomic environment and can be quickly in case of the diffusion from a pioneer country to later adopting countries.
JEL Code
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
29 October 2004
WORKING PAPER SERIES - No. 398
Details
Abstract
An unprecedented process of financial consolidation has taken place in the European Union over the past decade. Building on earlier US evidence, we examine the impact of strategic similarities between bidders and targets on post-merger financial performance. We find that, on average, bank mergers in the European Union resulted in improved return on capital. By making the assumption that balance-sheet resource allocation is indicative of the strategic focus of banks, we also find significantly different results for domestic and cross-border mergers. For domestic deals, it could be quite costly to integrate dissimilar institutions in terms of their loan, earnings, cost, deposits and size strategies. For cross-border mergers and acquisitions (M&As), differences of merging partners in their loan and credit risk strategies are conducive to a higher performance whereas diversity in their capital, cost structure as well as technology and innovation investments strategies are counterproductive from a performance standpoint.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G34 : Financial Economics→Corporate Finance and Governance→Mergers, Acquisitions, Restructuring, Corporate Governance
4 October 2005
OCCASIONAL PAPER SERIES - No. 37
Details
Abstract
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 shows how these indicators have been used to provide a broad assessment of developments in financing conditions in the euro area in recent years. The ECB's analysis of financing conditions is dynamic and seeks to reflect underlying changes in the euro area's financial structure.
JEL Code
G20 : Financial Economics→Financial Institutions and Services→General
G30 : Financial Economics→Corporate Finance and Governance→General
E40 : Macroeconomics and Monetary Economics→Money and Interest Rates→General
28 June 2007
OCCASIONAL PAPER SERIES - No. 63
Details
Abstract
This report analyses the financial position of non-financial enterprises in the euro area, in particular the amount of external financing, the choice between debt and equity and the composition and maturity structure of debt. It aims at identifying the main features of the euro area, as well as the peculiarities that depend on the country of origin and the sector of activity. Attention is also devoted to assessing whether a country's institutional features are correlated with different financial structures by firms. In light of the particular interest in the access of small and medium-sized enterprises (SMEs) to financing, the report also analyses how financing patterns differ across large, medium-sized and small enterprises. Finally, the report discusses the recent trends observed in the corporate finance landscape of the euro area over the past few years. Although it is still too early to pass final judgement, vast structural changes are underway that could have already influenced in a positive way in the availability of external funds for firms. All in all, a comprehensive understanding of corporate finance in the euro area is important from a monetary policy perspective, given its impact on the transmission mechanism and for productivity and economic growth. Moreover, such an understanding is also relevant from a financial stability perspective. A first assessment is now possible eight years into the third stage of Economic and Monetary Union (EMU), given that sufficient data have been accumulated during this period. This assessment is particularly important as the introduction of the single currency has had significant structural effects on the working of financial markets, increasing their size and liquidity, and fostering cross-border competition. The data available for this report generally cover the period 1995-2005, and the cut-off date for the statistics included is 10 March 2007.
JEL Code
D92 : Microeconomics→Intertemporal Choice→Intertemporal Firm Choice, Investment, Capacity, and Financing
G30 : Financial Economics→Corporate Finance and Governance→General
G10 : Financial Economics→General Financial Markets→General
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
K40 : Law and Economics→Legal Procedure, the Legal System, and Illegal Behavior→General
17 December 2007
WORKING PAPER SERIES - No. 838
Details
Abstract
The dramatic increase in securitisation activity has odified the functioning of credit markets by reducing the fundamental role of liquidity transformation performed by financial intermediaries. We claim that the changing role of banks from
JEL Code
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
7 January 2009
WORKING PAPER SERIES - No. 989
Details
Abstract
We model the determinants of loans to non-financial corporations in the euro area. Using the Johansen (1992) methodology, we identify three cointegrating relationships. These relationships are interpreted as the long-run loan demand, investment and loan supply equations. The short-run dynamics of loan demand for the euro area are subsequently modelled by means of a Vector Error Correction Model (VECM). We perform a number of specification tests, which suggest that developments in loans to non-financial corporations in the euro area can be reasonably explained by the model. We then use the estimated model to analyse the impact of permanent and temporary shocks to the policy rate on bank lending to nonfinancial corporations.
JEL Code
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
C51 : Mathematical and Quantitative Methods→Econometric Modeling→Model Construction and Estimation
10 March 2009
WORKING PAPER SERIES - No. 1028
Details
Abstract
Following the introduction of the euro, the markets for large debt financing experienced a historical expansion. We investigate the financial factors behind the issuance of syndicated loans for an extensive sample of euro area non-financial corporations. For the first time we compare these factors to those of its major competitor: the corporate bond market. We find that large firms, with greater financial leverage, more (verifiable) profits and higher liquidation values tend to prefer syndicated loans. In contrast, firms with larger levels of short-term debt and those perceived by markets as having more growth opportunities favour financing through corporate bonds.
JEL Code
D40 : Microeconomics→Market Structure and Pricing→General
F30 : International Economics→International Finance→General
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
31 July 2009
WORKING PAPER SERIES - No. 1075
Details
Abstract
We find evidence of a bank lending channel for the euro area operating via bank risk. Financial innovation and the new ways to transfer credit risk have tended to diminish the informational content of standard bank balance-sheet indicators. We show that bank risk conditions, as perceived by financial market investors, need to be considered, together with the other indicators (i.e. size, liquidity and capitalization), traditionally used in the bank lending channel literature to assess a bank
JEL Code
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
31 March 2010
WORKING PAPER SERIES - No. 1166
Details
Abstract
This paper investigates the relationship between short-term interest rates and bank risk. Using a unique database that includes quarterly balance sheet information for listed banks operating in the European Union and the United States in the last decade, we find evidence that unusually low interest rates over an extended period of time contributed to an increase in banks' risk. This result holds for a wide range of measures of risk, as well as macroeconomic and institutional controls.
JEL Code
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
10 June 2010
WORKING PAPER SERIES - No. 1211
Details
Abstract
We analyse the impact of efficiency on bank risk. We also consider whether bank capital has an effect on this relationship. We model the inter-temporal relationships among efficiency, capital and risk for a large sample of commercial banks operating in the European Union. We find that reductions in cost and revenue efficiencies increase banks' future risks thus supporting the bad management and efficiency version of the moral hazard hypotheses. In contrast, bank efficiency improvements contribute to shore up bank capital levels. Our findings suggest that banks lagging behind in their efficiency levels might expect higher risk and subdued capital positions in the near future.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
C23 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Panel Data Models, Spatio-temporal Models
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
Network
Macroprudential Research Network
11 January 2011
WORKING PAPER SERIES - No. 1287
Details
Abstract
It has often been argued during the recent credit crisis that commercial banks’ involvement in investment banking activities might have had an impact on the intensity of their underwriting standards. We turn to evidence from the period prior to the complete revocation of the Glass-Steagall Act in the United States and analyze whether investment banks or – section 20 subsidiaries of – commercial banks underwrote riskier securities. We compare actual defaults of these deals for an extensive sample of about 4,000 corporate debt securities underwritten during the period of the de facto softening of the Act’s restrictions. Securities underwritten by commercial banks’ subsidiaries have a higher probability of default than those underwritten by investment houses. This evidence is stronger in the case of ex-ante riskier and more competitive issues, and during the first years of bank securities’ subsidiaries’ entry into the market. Based on our results, it is not possible to reject that the repeal of the Glass-Steagall led to looser credit screening by broad (universal) banking companies trying to gain market share and/or to the lower initial ability of these banks to correctly evaluate default risk.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G24 : Financial Economics→Financial Institutions and Services→Investment Banking, Venture Capital, Brokerage, Ratings and Ratings Agencies
N22 : Economic History→Financial Markets and Institutions→U.S., Canada: 1913?
20 April 2011
WORKING PAPER SERIES - No. 1329
Details
Abstract
While the 2007-2010 financial crisis has hit a variety of countries asymmetrically, the case of Spain is particularly illustrative: this country experienced a pronounced housing bubble partly funded via spectacular developments in its securitization markets leading to looser credit standards and subsequent financial stability problems. We analyze the sequential deterioration of credit in this country considering rating changes in individual securitized deals and on balance sheet bank conditions. Using a sample of 20,286 observations on securities and rating changes from 2000Q1 to 2010Q1 we build a model in which loan growth, on balancesheet credit quality and rating changes are estimated simultaneously. Our results suggest that loan growth significantly affects on balance-sheet loan performance with a lag of at least two years. Additionally, loan performance is found to lead rating changes with a lag of four quarters. Importantly, bank characteristics (in particular, observed solvency, cash flow generation and cost efficiency) also affect ratings considerably. Additionally, these other bank characteristics seem to have a higher weight in the rating changes of securities issued by savings banks as compared to those issued by commercial banks.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
2 May 2011
WORKING PAPER SERIES - No. 1335
Details
Abstract
The 2007-2010 financial crisis highlighted the central role of financial intermediaries
JEL Code
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
20 July 2011
WORKING PAPER SERIES - No. 1362
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Abstract
We investigate the effect of securitization activity on banks’ lending standards using evidence from pricing behavior on the syndicated loan market. We find that banks more active at originating asset-backed securities are also more aggressive on their loan pricing practices. This suggests that securitization activity lead to laxer credit standards. Macroeconomic factors also play a large role explaining the impact of securitization activity on bank lending standards: banks more active in the securitization markets loosened more aggressively their lending standards in the run up to the recent financial crisis but also tightened more strongly during the crisis period. As a continuum of this paper we are examining whether individual loans that are eventually securitized are priced more aggressively by using unique European data on individual loans from all major trustees.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
4 November 2011
WORKING PAPER SERIES - No. 1394
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Abstract
We exploit the 2007-2009 financial crisis to analyze how risk relates to bank business models. Institutions with higher risk exposure had less capital, larger size, greater reliance on short-term market funding, and aggressive credit growth. Business models related to significantly reduced bank risk were characterized by a strong deposit base and greater income diversification. The effect of business models is non-linear: it has a different impact on riskier banks. Finally, it is difficult to establish in real time whether greater stock market capitalization involves real value creation or the accumulation of latent risk.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G15 : Financial Economics→General Financial Markets→International Financial Markets
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
Network
Macroprudential Research Network
15 March 2012
WORKING PAPER SERIES - No. 1427
Details
Abstract
We analyze whether the impact of monetary policy on bank risk depends upon bank characteristics. We relate the materialization of bank risk during the financial crisis to differences in the monetary policy stance and bank characteristics in the pre-crisis period for a large sample of listed banks operating in the European Union and the United States. We find that the insulation effect produced by capital and liquidity buffers on bank risk was lower for banks operating in countries that, prior to the crisis, experienced a particularly prolonged period of low interest rates.
JEL Code
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
Network
Macroprudential Research Network
18 October 2012
WORKING PAPER SERIES - No. 1484
Details
Abstract
This paper examines the quality of credit ratings assigned to banks in Europe and the United States by the three largest rating agencies over the past two decades. We interpret credit ratings as relative assessments of creditworthiness, and define a new ordinal metric of rating error based on banks' expected default frequencies. Our results suggest that rating agencies assign more positive ratings to large banks and to those institutions more likely to provide the rating agency with additional securities rating business (as indicated by private structured credit origination activity). These competitive distortions are economically significant and contribute to perpetuate the existence of
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
21 May 2014
WORKING PAPER SERIES - No. 1678
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Abstract
We find that the increased use of securitisation activity in the banking sector prior to the 2007- 2009 crisis augmented the effect of competition on realised bank risk (i.e. more intense competition and greater use of securitisation is correlated with higher levels of realised risk) during the crisis. In contrast, higher levels of capital did not buffer the impact of competition on realised risk. It follows that cooperation between supervisory and competition authorities is warranted to account for the stability implications of financial innovation and capital regulation.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
1 February 2017
WORKING PAPER SERIES - No. 2009
Details
Abstract
Banks are usually better informed on the loans they originate than other financial intermediaries. As a result, securitized loans might be of lower credit quality than otherwise similar non-securitized loans. We assess the effect of securitization activity on loans
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
30 March 2017
RESEARCH BULLETIN - No. 32
Details
Abstract
It is commonly argued that in the run-up to the recent financial crisis, banks selected and securitised loans of relatively lower credit quality. This article reviews new evidence from the euro-denominated corporate loan market which suggests that this presumption does not hold for this market segment in Europe. Banks that were more active in securitisation markets are also not found to offer, all else being equal, lower lending rates to borrowers. Our results complement earlier findings from the US securitisation markets.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
7 February 2019
WORKING PAPER SERIES - No. 2236
Details
Abstract
We examine the link between issuer reputation and mortgage-backed security (MBS) performance using a sample of 4,247 European MBS issued between 1999 and 2007. We measure performance with credit rating downgrades and delinquencies and track their changes over the long term. We find that, overall, MBS sold by reputable issuers are collateralised by higher quality asset pools which have lower delinquency rates and are less likely to be downgraded. However, as credit standards declined during the boom period of 2005-2007, asset pools securitized by reputable issuers were of worse quality compared to those securitized by less reputable issuers. Therefore, reputation as a self-disciplining mechanism failed to incentivise the production of high quality securities during the credit boom.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G24 : Financial Economics→Financial Institutions and Services→Investment Banking, Venture Capital, Brokerage, Ratings and Ratings Agencies
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
18 March 2019
WORKING PAPER SERIES - No. 2249
Details
Abstract
We assess how a major, unconventional central bank intervention, Draghi’s “whatever it takes” speech, affected lending conditions. Similar to other large interventions, it responded to adverse financial and macroeconomic developments that also influenced the supply and demand for credit. We avoid such endogeneity concerns by focusing on a third country and comparing lending conditions by euro area and other banks to the same borrower. We show that the intervention reversed prior risk-taking – in volume, price, and loan credit ratings – by subsidiaries of euro area banks relative to local and other foreign banks. Our results document a new effect of large central banks’ interventions and are robust along many dimensions.
JEL Code
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
F34 : International Economics→International Finance→International Lending and Debt Problems
Network
Research Task Force (RTF)
27 May 2019
WORKING PAPER SERIES - No. 2287
Details
Abstract
The architecture of supervision – how we define the allocation of supervisory powers to different policy institutions – can have implications for policy conduct and for the economic and financial environment in which these policies are implemented. Theoretically, an integrated structure for monetary policy and supervision brings important benefits arising from better information flow and policy coordination. Aggregate supervisory information may significantly improve the conduct of monetary policy and the effectiveness of the lender of last resort function. As long as the process towards an integrated structure does not shrink the set of available tools, monetary policy and supervision are no less effective in pursuing their objectives than a separated structure. Additionally, an integrated structure does not seem to be correlated with more price and/or financial instability, as suggested by analysing a large global set of countries with different supervisory set-ups. A centralised structure for supervision entails significant benefits in terms of fewer opportunities for supervisory arbitrage by banks and less informational asymmetry. A large central supervisor can take advantage of economies of scale and scope in supervision and gain a broader perspective on the stability of the entire banking sector, which should result in improved financial stability. Potential drawbacks of a centralised supervisory structure are the possible lack of specialisation relative to local supervisors and the increased distance between the supervisor and the supervised institutions. We discuss the implications of our findings in the euro area context and in relation to the design of the Single Supervisory Mechanism (SSM).
JEL Code
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G38 : Financial Economics→Corporate Finance and Governance→Government Policy and Regulation
Network
Discussion papers
20 February 2020
WORKING PAPER SERIES - No. 2377
Details
Abstract
The response of major central banks to the global financial crisis has revived the debate around the interactions between monetary policy (MP) and bank stability. This technical paper sheds light, quantitatively, on the different mechanisms underlying the relationship between MP and bank stability. It does so by reviewing microeconometric studies from the academic literature as well as those conducted internally at the ECB. The paper proceeds chronologically, using the recent crisis as a touchstone. First, it provides a brief overview of the main theoretical channels linking bank stability and the transmission of MP. It then analyses the evidence from the pre-crisis period in the light of the structural trends leading up to the crisis. As the crisis erupted, unconventional monetary policy (UMP) measures were deployed, and the paper suggests that these were essential to buttress bank stability and halt a systemic crisis. At the same time, these measures involved trade-offs, and the adverse spillovers on banks’ intermediation capacity and risk-taking require close monitoring. The paper ends by offering a critical review of the methodologies employed and suggestions for the areas where analytical efforts should be focussed in the future.
JEL Code
E4 : Macroeconomics and Monetary Economics→Money and Interest Rates
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G20 : Financial Economics→Financial Institutions and Services→General
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
14 May 2021
WORKING PAPER SERIES - No. 2550
Details
Abstract
Do climate-oriented regulatory policies affect the flow of credit towards polluting corporations? We match loan-level data to firm-level greenhouse gas emissions to assess the impact of the Paris Agreement. We find that, following this agreement, European banks reallocated credit away from polluting firms. In the aftermath of President Trump’s 2017 announcement that the United States was withdrawing from the Paris Agreement, lending by European banks to polluting firms in the United States decreased even further in relative terms. It follows that green regulatory initiatives in banking can have a significant impact combating climate change.
JEL Code
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
H23 : Public Economics→Taxation, Subsidies, and Revenue→Externalities, Redistributive Effects, Environmental Taxes and Subsidies
2019
European Financial Management
  • Kara, A., D. Marques‐Ibanez and S. Ongena
2017
European Central Bank, Research Bulletin
Securitisation, credit risk and lending standards revisited
  • Marqués-Ibáñez, D.
2017
Journal of Financial Intermediation
  • Altunbas, Y., S. Manganelli and D. Marques-Ibanez
2016
Journal of Finance 71(5), 1933-1974
  • Drechsler, I., T. Drechsel, D. Marques-Ibanez and P. Schnabl
2016
Journal of Financial Stability 26, 107-127
  • Kara, A., D. Marques-Ibanez and S. Ongena
2014
Journal of Money, Credit and Banking 46, 327-331
Comment on “Foreign banks: Trends and impact” by Claessens, S. and N. van Horen
  • Marques-Ibanez, D.
2014
International Journal of Central Banking 10, 95-136
Does monetary policy affect bank risk-taking?
  • Altunbas Y., L. Gambacorta and D. Marques-Ibanez
2014
Journal of International Financial Markets, Institutions and Money 32, 473-490
Determinants of syndicated lending in European banks and the impact of the financial crisis
  • Howcroft, B., A. Kara, and D. Marques-Ibanez
2013
Economic Policy 28 (74), 289-333
Bank ratings: What determines their quality?
  • Hau H., S. Langfield and D. Marques-Ibanez
2013
Journal of Banking and Finance 37(6), 2000-2010
Is bank default risk systematic?
  • Fiordelisi, F, D. Marques-Ibanez
2012
Economic Letters 117, 220-222.
Do bank characteristics influence the effect of monetary policy on bank risk?
  • Altunbas Y., L. Gambacorta and D. Marques-Ibanez
2012
Journal of International Money and Finance 31, 80-101
Securitization, credit growth and financial instability: the case of Spain
  • Carbó-Valverde, S., D. Marques-Ibanez, F. Rodríguez-Fernández
2011
Economic Policy 26(66),137-182
The new bank lending channel: Evidence from the crisis
  • Gambacorta, L. and D. Marques-Ibanez
2011
Journal of Banking and Finance 35(5),1315-1326
Efficiency and risk in European banking
  • Fiordelisi, F, D. Marques-Ibanez and P. Molyneux
2010
Journal of Financial Stability 6, 121–129
Bank risk and monetary policy
  • Altunbas Y., L. Gambacorta and D. Marques-Ibanez
2010
European Journal of Finance 16 (5), 437-458
Large debt financing: syndicated loans versus corporate bonds
  • Altunbas, Y., A. Kara and D. Marques-Ibanez
2009
European Economic Review 53, 8, 996-1009
Securitisation and the bank lending channel
  • Altunbas Y., L. Gambacorta and D. Marques-Ibanez
2008
Journal of Business and Economics 60, 3, 179-290
Mergers and acquisitions and bank performance in Europe: the role of strategic similarities
  • Altunbas, Y. and D. Marques-Ibanez
2008
Journal of Financial Services Research 27, 2, 163-181
High-yield bond diffusion in the United States, the United Kingdom and the euro area
  • De Bondt G. and D. Marqués-Ibáñez
2005
Kredit und Kapital 4
Bank capital, bank lending and monetary policy in the euro area
  • Altunbas, Y. and D. Marqués-Ibáñez
2010
Handbook of Banking, Oxford University Press
Securitisation: Causes and consequences
  • Marques-Ibanez D. and M. Scheicher