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    Bank of Finland, Rauhankatu 19 B, Helsinki

Fabio Canova (European University Institute/BI Norwegian Business School): Mending the broken link: Heterogeneous bank lending and monetary policy pass-through

We analyze the pass-through of monetary policy measures to firms and household lending rates in the euro area using a novel bank-level dataset. Banks' characteristics such as the capital ratio, the exposure to sovereign debt, and the percentage of non-performing loans are responsible for the heterogeneity of pass-through of conventional monetary policy changes. The location of a bank is instead irrelevant. Non-standard measures normalized the capacity of banks to grant loans. Banks with high level of non-performing loans and low capital ratio were most affected. Banks' lending margins were also affected. Macroeconomic implications are discussed.


Research seminars organised by the Bank of Finland's research unit are held on Thursdays at 10:30–12:00 in Rauhankatu 19, 3rd floor big meeting room (unless indicated otherwise). Seminars are held in English.

Research seminars are open to all economists (unless indicated otherwise). Please register in advance at research(at)bof.fi by noon of the preceding day. Visitors will be escorted from Rauhankatu 19 B (Kirjasto/Library) entrance to the seminar room 10 minutes before the seminar.