What is the Impact of a Major Unconventional Monetary Policy Intervention?

Abstract How does the credible announcement of an unconventional monetary policy intervention affect bank lending standards during crises? We use a major central bank announcement, the “whatever it takes” speech of the European Central Bank President that boosted the capital of banks, as a natural experiment. We compare changes in lending standards of subsidiaries of euro area versus other banks in a third country, Mexico. The speech reversed a prior trend of euro area banks augmenting their risk-taking via loan growth, lending rates, and credit risk. Our findings show that policies that amount to capitalization can reduce risk-taking in times of stress, adding a new dimension to the bank capital channel. (JEL: E51; G21; F34)

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Publication Details

Journal
Journal of the European Economic Association
Published
2026-03-21
DOI
https://doi.org/10.1093/jeea/jvag015
Primary Topic
Banking stability, regulation, efficiency
Type
article
Field-Weighted Citation Impact
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article

What is the Impact of a Major Unconventional Monetary Policy Intervention?

Gabriel Cuadra, Horacio Sapriza, David Marques-Ibanez, Stijn Claessens et al.
Journal of the European Economic Association
Banking stability, regulation, efficiency
article

What is the Impact of a Major Unconventional Monetary Policy Intervention?

Gabriel Cuadra, Horacio Sapriza, David Marques-Ibanez, Stijn Claessens, Carlos Alcaraz
article en

Abstract

Abstract How does the credible announcement of an unconventional monetary policy intervention affect bank lending standards during crises? We use a major central bank announcement, the “whatever it takes” speech of the European Central Bank President that boosted the capital of banks, as a natural experiment. We compare changes in lending standards of subsidiaries of euro area versus other banks in a third country, Mexico. The speech reversed a prior trend of euro area banks augmenting their risk-taking via loan growth, lending rates, and credit risk. Our findings show that policies that amount to capitalization can reduce risk-taking in times of stress, adding a new dimension to the bank capital channel. (JEL: E51; G21; F34)

Journal of the European Economic Association
European Central Bank (DE), Instituto Tecnológico Autónomo de México (MX), Bank of Mexico (MX), Yale University (US), Federal Reserve Bank of Richmond (US)
Openalex Percentile: Top 12%
Banking stability, regulation, efficiency
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What is the Impact of a Major Unconventional Monetary Policy Intervention? — Gabriel Cuadra, Horacio Sapriza, et al. · Journal of the European Economic Association (2026) | TGRS Research Map | TGRS