Citation

Discussion Paper Details

Please find the details for DP13616 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The Impact of Monetary Conditions on Bank Lending to Households

Author(s): Gyöngyösi, Steven Ongena and Ibolya Schindele

Publication Date: March 2019

Keyword(s): bank balance-sheet channel, Foreign currency lending, household lending and monetary policy

Programme Area(s): Financial Economics

Abstract: We study the impact of monetary conditions on the supply of mortgage credit by banks to households. Using comprehensive credit register data from Hungary, we first establish a "bank-lending-to-households" channel by showing that monetary conditions affect the supply of mortgage credit in volume. We then study the impact of monetary conditions on the composition of mortgage credit along its currency denomination and borrower risk. We find that expansionary domestic monetary conditions increase the supply of mortgage credit to all households in the domestic currency and to risky households in the foreign currency. Because most households are unhedged, bank lending in multiple currencies may involve additional risk taking. Changes in foreign monetary conditions affect lending in the foreign currency more than in the domestic currency, and also differ in their compositional impact along firm risk.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13616

Bibliographic Reference

Gyöngyösi, , Ongena, S and Schindele, I. 2019. 'The Impact of Monetary Conditions on Bank Lending to Households'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13616