The study analyses the differences in lending policies across banks characterised by different types of ownership, using micro-level data on Euro area banks during the period 1999-2011 to detect possible variations in bank lending supply responses to changes in monetary policy. The results identify a general difference between stakeholder and shareholder banks: following a monetary policy contraction, stakeholder banks decrease their loan supply to a lesser extent than shareholder banks. A detailed analysis of the effect among stakeholder banks reveals that cooperative banks continued to smooth the impact of tighter monetary policy on their lending during the crisis period (2008-2011), whereas savings banks did not. Stakeholder banks’ propensity to smooth their lending cycles suggests that their presence in the economy has the potential to reduce credit supply volatility.
The study can be accessed HERE.