Title Fragmentation and monetary policy in the euro area / A.J. Al-Eyd, Pelin Berkmen

Published Washington, D.C. : International Monetary Fund, European Department, 2013

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Description 1 online resource (31 pages) Series IMF working paper ; WP/13/208 IMF working paper ; WP/13/208. Contents Cover -- Contents -- Abstract -- I. Introduction -- II. Fragmentation: Why Have Lending Rates Diverged? -- III. Fragmentation and Monetary Transmission -- IV. Assessing Monetary Pass-through -- A. Model Specification -- B. Estimation Results -- V. Policy Considerations and Conclusions -- Tables -- 1. Summary Estimates for the Interest Pass-through to Small Loans -- A1. Estimates for the Interest Pass-through to Small Loans: Euro Area and Core -- A2. Estimates for the Interest Pass-through to Small Loans: Periphery A3. Estimates for the Interest Pass-through to Large Loans: Euro Area and CoreA4. Estimates for the Interest Pass-through to Large Loans: Periphery -- Figures -- 1. Euro Area: Financial Market Fragmentation -- 2. Euro Area: Banking Sector Developments -- 3. Actual and Counterfactual Interest Rates with no Funding Pressures -- Boxes -- 1. Assessing OMTs and Redenomination Risks -- 2. Eurosystem Collateral -- 3. Funding for Lending Scheme by the BoE -- References Summary "The ECB has taken a range of actions to address bank funding problems, eliminate excessive risk in sovereign markets, and safeguard monetary transmission. But euro area financial markets have remained fragmented, driving retail interest rates in stressed markets far above those in the core. This has impeded the flow of credit and undermined the transmission of monetary policy. Analysis presented here indicates that the credit channel of monetary policy has broken down during the crisis, particularly in stressed markets, and that SMEs in these economies appear to be most affected by elevated lending rates. Given these stresses, the ECB can undertake additional targeted policy measures, including through additional term loans, collateral policies, and private asset purchases."--Summary Notes "October 2013." Subject Interest rates -- European Union countries Monetary policy -- European Union countries Interest rates Monetary policy European Union countries Form Electronic book Author Berkmen, Pelin, author. International Monetary Fund. European Department, issuing body. ISBN 9781484365113 1484365119

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