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Markus Demary IW-Trends No. 3 12. October 2015 IW Bank Monitor 2015

Is Bank Lending Growth Sluggish Despite or Because of the Progress Achieved in Recapitalisation?

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IW Bank Monitor 2015
Markus Demary IW-Trends No. 3 12. October 2015

IW Bank Monitor 2015

IW-Trends

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German Economic Institute German Economic Institute

Is Bank Lending Growth Sluggish Despite or Because of the Progress Achieved in Recapitalisation?

Eurozone banks are still in a process of balance sheet repair. Although bank lending is currently recovering, many banks have continued to expand their holdings of government bonds and remained reluctant to grant loans despite the progress they have made in recapitalisation. Analyses based on the IW Bank Monitor, a database containing financial data from the Eurozone’s largest banks, suggest that banks reduced their loans in order to meet the regulatory equtiy capital ratio ahead of the European Central Bank’s stress test. What is apparent, however, is that profitable banks with stable funding sources like deposits have been better able to maintain their lending. Further analyses point up the positive influence of banks’ profitability on the stability of their lending, their ability to pass the stress test and their progress in recapitalisation. Financial stability and an adequate supply of credit to the real economy therefore require a business environment in which banks can return to profitability.

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IW Bank Monitor 2015
Markus Demary IW-Trends No. 3 12. October 2015

Markus Demary: IW-Bankenmonitor 2015 – Schleppende Kreditentwicklung trotz oder wegen der Rekapitalisierungsfortschritte?

IW-Trends

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German Economic Institute German Economic Institute

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How persistent are the current inflationary dynamics and how is monetary policy expected to respond?
Markus Demary / Anna-Lena Herforth / Jonas Zdrzalek IW-Report No. 16 13. April 2022

The new inflationary environment: How persistent are the current inflationary dynamics and how is monetary policy expected to respond?

We argue that the period of low inflation has come to an end based on six structural factors, which define the new inflationary environment.

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Markus Demary / Michael Hüther in Intereconomics External Publication 15. February 2022

How Large Is the Risk of Stagflation in the Eurozone

The rapid recovery of demand combined with supply constraints has led to rising prices during the past months. This is evident in oil and gas markets, but also in international trade, which has been thrown out of step by bottlenecks at Asian ports.

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