Eurozone’s reserve-rich banks less sensitive to rate hikes, paper finds
Higher reserves meant some banks kept lending after rates rose, Bundesbank paper says
Recent monetary tightening in the eurozone has had a lower impact on credit supply than could have been expected, research published by the Bundesbank finds.
This is because reserve-rich banks have been able to sustain lending, Daniel Fricke, Stefan Greppmair and Karol Paludkiewicz say in a discussion paper. The authors examine the performance of eurozone banks from January 2022 to February 2023. Quantitative easing following the 2008 crisis meant certain banks had higher reserve levels than they
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