A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.
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Topic
Publication year
Whatever It Takes: The Real Effects of Unconventional Monetary Policy
Resource type
Authors/contributors
- Acharya, Viral V (Author)
- Eisert, Tim (Author)
- Eufinger, Christian (Author)
- Hirsch, Christian (Author)
Title
Whatever It Takes: The Real Effects of Unconventional Monetary Policy
Abstract
Launched in Summer 2012, the European Central Bank’s (ECB) Outright Monetary Transactions (OMT) program indirectly recapitalized European banks through its positive impact on periphery sovereign bonds. However, the stability reestablished in the banking sector did not fully translate into economic growth. We document zombie lending by banks that remained weakly capitalized even post-OMT. In turn, firms receiving loans used these funds not to undertake real economic activity, such as employment and investment, but to build cash reserves. Creditworthy firms in industries with a high zombie firm prevalence significantly suffered from this credit misallocation, which further slowed the economic recovery.
Publication
Review of Financial Studies
Volume
32
Issue
9
Pages
3366-3411
Date
2019
Citation
Acharya, V. V., Eisert, T., Eufinger, C., & Hirsch, C. (2019). Whatever It Takes: The Real Effects of Unconventional Monetary Policy. Review of Financial Studies, 32, 3366–3411.
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