Π‘ΡΠ΄ΡΡΠΆΠ°Π½ΠΈΠ΅ΡΠΎ Π½Π΅ Π΅ Π½Π°Π»ΠΈΡΠ½ΠΎ Π½Π° Π±ΡΠ»Π³Π°ΡΡΠΊΠΈ Π΅Π·ΠΈΠΊ.
Jani Matilainen
- 21 September 2021
- OCCASIONAL PAPER SERIES - No. 270Details
- Abstract
- The financing structure of the euro area economy has evolved since the global financial crisis with non-bank financial intermediation taking a more prominent role. This shift affects the transmission of monetary policy. Compared with banks, non-bank financial intermediaries are more responsive to monetary policy measures that influence longer-term interest rates, such as asset purchases. The increasing role of debt securities in the financing structure of firms also leads to a stronger transmission of long-rate shocks. At the same time, short-term policy rates remain an effective tool to steer economic outcomes in the euro area, which is still highly reliant on bank loans. Amid a low interest rate environment, the growth of market-based finance has been accompanied by increased credit, liquidity and duration risk in the non-bank sector. Interconnections in the financial system can amplify contagion and impair the smooth transmission of monetary policy in periods of market distress. The growing importance of non-bank financial intermediaries has implications for the functioning of financial market segments relevant for monetary policy transmission, in particular the money markets and the bond markets.
- JEL Code
- E4 : Macroeconomics and Monetary EconomicsβMoney and Interest Rates
E5 : Macroeconomics and Monetary EconomicsβMonetary Policy, Central Banking, and the Supply of Money and Credit
G2 : Financial EconomicsβFinancial Institutions and Services
G38 : Financial EconomicsβCorporate Finance and GovernanceβGovernment Policy and Regulation