ECB: monetary policy could have prevented the crisis
A European Central Bank (ECB) paper published in October shows that low short-term interest rates, rather than long-term interest rates, softened pre-crisis lending standards.
Angela Maddaloni and José-Luis Peydró, the paper's authors, use United States and eurozone bank lending data to compare the impact of short-term and long-term interest rates on lending standards.
Maddaloni and Peydró show that low short-term rates significantly weakened securitisation and supervision standards. However
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