Conference Agenda

We study how financing constraints affect investment and monetary-policy transmission in euro-area firms, using a novel PLS-based financing-gap index that combines firm-level survey responses with market information. The evidence shows that firms facing a widening financing gap experience significantly lower investment growth, consistent with the presence of credit frictions. This effect is magnified during periods of monetary policy tightening, highlighting the financing gap as a central channel of monetary transmission. We further demonstrate that the new index closely tracks the survey-based measure and shows stronger predictive performance for the financing gap and key economic indicators. Overall, the results suggest that the new financing-gap index provides an empirically robust and economically meaningful tool for firms and policymakers to analyze how shifts in credit conditions affect investment dynamics.

This study examines how maturity mismatches in banks’ balance sheets shape the transmission of monetary policy to credit supply. Linking supervisory data on approximately 1,800 euro area banks to loan-level credit records, we show that the role of maturity mismatches is highly shock-specific. Mismatches amplify the effects of unconventional but not conventional monetary policies. Banks with larger maturity gaps reduce lending more sharply following monetary policy surprises regarding quantitative tightening (QT) because valuation losses on longterm assets negatively affect their net worth, causing tighter leverage constraints. To rationalize these findings, we develop a medium-scale New Keynesian DSGE model featuring a segmented financial sector, where intermediaries are differentiated by their maturity gaps. This framework explains the observed asymmetry: the high-mismatch banking segment is more exposed to long-duration losses that compress net worth, tighten endogenous leverage constraints, and amplify real economic effects through an investment wedge, whereas standard policy rate shocks—which mainly affect short-term rates—generate little heterogeneity in lending responses.

This paper examines the deposit channel of monetary policy during the fastest and most intense tightening cycle of the Euro era. Using the universal Spanish credit register and regional variation in deposit market concentration, we show that limited pass-through of policy rates to deposit rates ---driven by banks' regional market power--- produces heterogeneous effects on bank credit supply and risk-taking. Following the tightening cycle, banks operating in more concentrated deposit markets reduced credit more sharply to riskier firms. For newly originated loans, this contraction was accompanied by higher interest rates and improved realized returns. We document a novel dimension of the deposit channel: it compels banks to actively optimize their risk-return trade-off. Our results show that preserving deposit franchise value leads banks to prioritize prudence, reversing the "search-for-yield" dynamic observed during the zero-lower-bound era.

We provide the first micro-level evidence on the mechanisms through which monetary policy transmits in an emerging market (EMs). Using high-frequency identification and a detailed dataset covering over 10 million firm-month bank-loan observations, we move beyond simply documenting monetary policy effects to uncover the transmission mechanism itself. Credit falls earlier, more sharply, and more persistently for young firms, SMEs, and firms with recent delinquencies, consistent with a financial-frictions channel. Credit to durable-goods producers also declines more, consistent with an interest-rate channel. However, contrary to the pattern documented for advanced-economy, the financial-frictions channel dominates the interest-rate channel, underscoring the distinctive nature of monetary transmission in EMs. Further evidence suggests this dominance extends to employment growth.