Please be invited to the upcoming Latvijas Banka’s research seminar, to take place on 13 October at 10:30, in which Diana Bonfim (ECB and Banco de Portugal) will present her work: Monetary Policy at the Margin
Diana will also provide a brief overview of the main findings of the recent ESCB ChaMP research network.
Abstract. Zero-bank-debt firms (ZBD firms) face, due to their lack of credit history, more difficult access to bank loans than firms with previous bank debt (non-ZBD firms). While overall monetary policy does not affect the likelihood that ZBD firms obtain credit for the first time relative to comparable non-ZBD firms, expansionary monetary policy eases the credit constraints faced by those firms, especially when they are young. As increased access to credit by ZBD firms does not lead to a higher probability of having non-performing loans but has greater effects on employment growth and investment than those experienced by comparable non-ZBD firms, this channel could be beneficial for the whole economy without entailing financial stability risks.