This paper isolates the operation of the ECB’s balance-sheet channel (2003-2016) by assessing how high-frequency identified asset-price surprises affect firm-based cash-to-asset ratios conditional on the value of available collateral. It is found that positive surprises that enhance future borrowing capacity reduce precautionary cash in particular amongst high-capital-stock (unproductive) firms.
The Ecb's Balance-Sheet Channel and Corporate Liquidity Demand
Benedicta Marzinotto
2023-01-01
Abstract
This paper isolates the operation of the ECB’s balance-sheet channel (2003-2016) by assessing how high-frequency identified asset-price surprises affect firm-based cash-to-asset ratios conditional on the value of available collateral. It is found that positive surprises that enhance future borrowing capacity reduce precautionary cash in particular amongst high-capital-stock (unproductive) firms.File in questo prodotto:
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