skip to content

Faculty of Economics

Journal Cover

Rodnyansky, A. and Darmouni, O.

The Effects of Quantitative Easing on Bank Lending Behavior

Review of Financial Studies, forthcoming


Abstract: Banks' exposure to large-scale asset purchases, as measured by the relative prevalence of mortgage-backed securities on their books, affects lending following unconventional monetary policy shocks. Using a difference-in-differences identification strategy, this paper finds strong effects of the first and third round of quantitative easing (QE1 and QE3) on credit. Highly affected commercial banks increase lending by 2% to 3% relative to their counterparts. QE2 had no significant impact, consistent with its exclusive focus on Treasuries sparsely held by banks. Overall, banks respond heterogeneously, and the type of asset being targeted is central to QE.

Keywords: Unconventional monetary policy, quantitative easing, bank lending, mortgage-backed securities

JEL Codes: E44, E52, G21

Author links: Alexander Rodnyansky  

Publisher's Link:

Open Access Full Text:

Papers and Publications

Recent Publications

Ambrus, A. and Elliott, M. Investments in Social Ties, Risk Sharing, and Inequality Review of Economic Studies [2021]

Merrick Li, Z. and Linton, O. A ReMeDI for Microstructure Noise Econometrica [2022]

Gallo, E. and Yan, C. Efficiency and Equilibrium in Network Games: An Experiment Review of Economics and Statistics, accepted [2022]

Dziubinski, M., Goyal, S. and Minarsch, D. E. N. The Strategy of Conquest Journal of Economic Theory [2021]