From Subprime Loans to Subprime Growth? : Evidence for the Euro Area /

The global financial crisis has highlighted the potential of financial conditions for influencing real economic activity. We examine the linkages between the financial and real sectors in the euro area, finding that (i) bank loan supply responds negatively to declines in bank soundness; (ii) a cutba...

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Автор: Cihak, Martin
Інші автори: Koeva Brooks, Petya
Формат: Журнал
Мова:English
Опубліковано: Washington, D.C. : International Monetary Fund, 2009.
Серія:IMF Working Papers; Working Paper ; No. 2009/069
Онлайн доступ:Full text available on IMF
Опис
Резюме:The global financial crisis has highlighted the potential of financial conditions for influencing real economic activity. We examine the linkages between the financial and real sectors in the euro area, finding that (i) bank loan supply responds negatively to declines in bank soundness; (ii) a cutback in bank loan supply has a negative impact on economic activity; (iii) a positive shock to the corporate bond spread lowers industrial output; and (iv) risk indicators for the banking, corporate, and public sectors show an improvement beginning in 2002-03, followed by a major deterioration since 2007. These estimates imply that the currently estimated bank losses would subtract some 2 percentage points from the euro area output (but with considerable uncertainty around the estimates).
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Фізичний опис:1 online resource (35 pages)
Формат:Mode of access: Internet
ISSN:1018-5941
Доступ:Electronic access restricted to authorized BRAC University faculty, staff and students