Bank lending margins in the euro area: Funding conditions,fragmentation and ECB's policies |
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Authors: | Helen Louri Petros M Migiakis |
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Abstract: | In this paper we study the determinants of lending margins paid by euro‐area corporates for their bank loans. Across two separate groups of countries (distressed and non‐distressed) we examine whether lending margins have been affected by structural changes in the banking sector, the credit and liquidity position of banks and the costs of funding in the corporate and sovereign bond markets. The role of ECB policies with respect to narrowing down the fragmentation in the bank lending channel is also investigated through a structural panel VAR model for the period 2003:1 to 2014:12. |
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Keywords: | bank lending margins ECB's policies financial fragmentation funding conditions structural panel VAR |
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