Abstract
We analyze the relationship between ECB monetary policy and prudential policies in the host country and international lending by Dutch insurers and pension funds, using confidential institution-specific data. Our results suggest that insurers and pension funds do not significantly change their foreign lending in response to ECB policy changes, proxied by a shadow rate capturing both conventional and unconventional monetary policies. However, our findings suggest that these financial institutions do increase foreign lending when banks in the host country are more constrained by prudential regulation, pointing to a substitution effect from banks to non-banks.
| Original language | English |
|---|---|
| Pages (from-to) | 445-456 |
| Number of pages | 12 |
| Journal | Open Economies Review |
| Volume | 30 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 15 Jul 2019 |
Funding
The authors thank Jasper de Boer, Marjo de Jong, Jairo Rivera Rozo, Pieter Stam, Paul Witteman and Linda de Zeeuw for providing confidential insurer and pension fund data, and Henk van Kerkhoff for help with data compilation. We also like to thank two reviewers for their comments on a previous version of the paper. The views expressed here are those of the authors and do not necessarily reflect those of The Financial Stability Board and De Nederlandsche Bank.
Keywords
- Insurance companies
- Monetary policy
- Pension funds
- Prudential policy
- Spillovers
