Economic Crises: Natural or Unnatural Catastrophes?Post-Print from HAL Abstract: Major central banks accept nonmarketable assets, such as pooled individual corporate loans, as collateral in their refinancing operations with banks. Such "eligible" loans to firms may provide a liquidity service to the banks which originate them. Banks may in turn pass on a part of this benefit to their borrowers in the form of a reduced interest rate: the eligibility discount. We exploit a surprise extension of the Eurosystem's set of eligible collateral to medium-quality corporate loans, the Additional Credit Claims (ACC) program of February 2012, to assess the eligibility discount to corporate loans spreads in France. We find that becoming eligible to the Eurosystem's collateral framework translates into a relative reduction in rates by 8 bps for new loans issued to ACC-eligible firms , controlling for loan-, firm-, and bank-level characteristics. We find that this collateral channel of monetary policy is only active for the banks which have a lower opportunity cost in pledging credit claims and which are well-capitalized. Keywords: collateral frameworks; eligibility discount; eurosystem; monetary policy (search for similar items in EconPapers) Published in The Economics of the Global Environment, 29, Springer International Publishing, pp.623-649, 2016, Studies in Economic Theory, 978-3-319-31943-8 / 978-3-319-31941-4. ⟨10.1007/978-3-319-31943-8_27⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03598241 DOI: 10.1007/978-3-319-31943-8_27 Access Statistics for this paper More papers in Post-Print from HAL |
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