Project

Regulation, monetary policy and bank funding

Code
3G002918
Duration
01 January 2018 → 31 December 2021
Funding
Research Foundation - Flanders (FWO)
Research disciplines
  • Social sciences
    • Applied economics
    • Economic history
    • Macroeconomics and monetary economics
    • Microeconomics
    • Tourism
Keywords
Monetary policy Bank regulation Bank funding Subordinated bonds
 
Project description

Our objective is to empirically investigate the determinants of European bank funding costs and the impact of (unconventional) monetary policy measures implemented by the ECB as well as new_prudential regulation on bank funding choices. Banks finance their assets not only with capital but_also with deposits from retail customers and funding provided by institutional investors in the form of bonds. These funding costs will determine the loan rates that banks will charge and hence will have an impact on economic growth. Since we have assembled data on all types of bonds issued by European banks over the last 15 years, we plan to empirically examine how monetary policy actions by the ECB have affected bank funding costs. Moreover, following the banking crisis, regulators have implemented various types of new regulations in order to increase the capital buffers and the liquidity buffers of the banks. We will investigate whether or not these new rules have been effective and we will examine how they affect bank funding choices and bank funding costs. These insights should help supervisors and policymakers in assessing their policies and designing optimal strategies to maintain financial stability.