Jasova, Martina
[VerfasserIn]
;
Mendicino, Caterina
[Sonstige Person, Familie und Körperschaft];
Supera, Dominik
[Sonstige Person, Familie und Körperschaft]
Policy Uncertainty, Lender of Last Resort and the Real Economy
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 18, 2020 erstellt
Beschreibung:
We show that a reduction in lender of last resort (LOLR) policy uncertainty positively affects bank lending and propagates to investment and employment. We exploit a unique policy that reduced uncertainty regarding the availability of future LOLR funding for banks as a quasi-natural experiment. Using micro-level data on banks, firms and loans in Portugal, we generate cross-sectional variation in banks' exposure to uncertainty and find that the size of the haircut subsidy - the gap between private market and central bank security valuations - plays a key role in the propagation of the shock to lending and the real economy