The reserve supply channel of unconventional monetary policy

• 成果类型: Article
• 署名作者: Diamond, William; Jiang, Zhengyang; Ma, Yiming
• 署名单位: University of Pennsylvania; Northwestern University; National Bureau of Economic Research; Columbia University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103887
• 发表日期: 2024
• 关键词: Financial intermediation; quantitative easing; Deposit competition; Balance sheet cost; structural estimation

摘要

We find that central bank reserves injected by QE crowd out bank lending. We estimate a structural model with cross-sectional instrumental variables for deposit and loan demand. Our results are determined by the elasticity of loan demand and the impact of reserve holdings on the cost of supplying loans. The reserves injected by QE raise loan rates by 7.4 basis points, and each dollar of reserves reduces bank lending by 7.7 cents. Our results imply that a large injection of central bank reserves has the unintended consequence of crowding out bank loans because of bank balance sheet costs.