Weak eurozone banks hindered monetary policy – Bundesbank paper
“High-risk” banks failed to increase loan spreads despite ECB liquidity injection, researchers say
The transmission of eurozone monetary policy in the financial crisis was impaired by weakly capitalised banks, a working paper published by the Deutsche Bundesbank finds.
In Does the lack of financial stability impair the transmission of monetary policy? former Reserve Bank of India deputy governor Viral Acharya and his co-authors look at data on bank deposits and loan spreads in the eurozone from January 2006 to June 2010.
This period saw the first stage of the global financial crisis
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