| Abstract [eng] |
Evaluation of the Euro Area Banking Sector Loan Portfolio in the Context of Quantitative Easing 67 pages, 14 tables, 9 pictures, 67 references. The main purpose of this master thesis is to determine whether quantitative easing affects banks through their lending in the euro area. The work consists of three main parts: the analysis of literature, the research and its results, conclusion and recommendations. Literature analysis reviews the usage of the quantitative easing in the world and in the euro area, the development of quantitative easing, also there are discussed the main risks associated with quantitative easing and also literature analysis reveals the importance of bank lending in the economy and analysis how bank lending has been affected by the global financial crisis. After the literature analysis the author has carried out the study about the impact of quantitative easing on bank lending among the 100 of banks operating in the euro area (directly supervised by the ECB). The period of the study is 2008-2015. The study raises 4 hypotheses: 1. The bank lending declined during the global financial crisis of 2008-2010 and before the introduction of non-standard monetary policy (quantitative easing) in the euro area in 2014 due to reduced bank liquidity and consequent portfolio of non-performing loans; 2. Quantitative easing has increased bank lending in the euro area due to increased bank liquidity; 3. Quantitative easing has increased bank lending in the euro area due to increased bank deposit volumes; 4. Due to the quantitative easing policy, banks' lending in 2015 was higher in banks operating in Germany, France, Italy and Spain than in other banks in the euro area. Using the regression, correlation analysis and econometric models, the author determined how quantitative easing influenced bank lending in the euro area. The study research used the equation provided in study methodology to which appropriate coefficients and bank-specific factors were added to confirm or reject the hypotheses. The banks were analyzed according to their size, specialization and location. The performed research revealed that quantitative easing did not affect bank lending in the euro area. The study research results that the banks' liquidity increased through a quantitative easing program, but the funds were used by the banks to reduce liquidity risk and increase their balances in order to return to profitability as soon as possible. Countries' GDP growth and inflation were negatively related to bank lending. In the context of the global financial crisis, bank lending has been most affected by non-performing loans. The impact of quantitative easing was not statistically significant and differed according to the size, specialization and location of banks. It is important to mention that that quantitative easing had a positive impact on the capital-asset ratio of banks. The conclusions and recommendations summarize that there was no quantitative easing impact on bank lending in the euro area. The author believes that the results of the study prove that more time is needed to make the effects of quantitative easing on bank lending clearly visible. |
