Abstract
Unconventional monetary policy measures like asset purchase programs aim to reduce certain securities' yield and alter financial institutions' investment behavior. These measures increase the institutions' market value of securities and add to their equity positions. We show that the extent of this recapitalization effect crucially depends on the securities' accounting and valuation methods, country-level regulation, and maturity structure. We argue that future research needs to consider these factors when quantifying banks' recapitalization effects and consequent changes in banks' lending decisions to the real sector.
| Original language | English |
|---|---|
| Pages (from-to) | 1123-1133 |
| Number of pages | 11 |
| Journal | Journal of Money, Credit and Banking |
| Volume | 54 |
| Issue number | 4 |
| Early online date | 6 Dec 2021 |
| DOIs | |
| Publication status | Published - Jun 2022 |
Bibliographical note
Publisher Copyright:© 2021 The Authors. Journal of Money, Credit and Banking published by Wiley Periodicals LLC on behalf of Ohio State University
Funding
Open access funding enabled and organized by Projekt DEAL.
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 17 Partnerships for the Goals
Keywords
- capital regulation
- security valuation
- unconventional monetary policy
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