Unconventional ECB measures drive down banking interest rates in Euro Area.
The study looked at how the European Central Bank's policies affect interest rates at banks when rates are already very low. They used a special model to see how different countries were affected. The researchers found that the ECB's unconventional measures, like providing extra money or buying certain bonds, did impact bank interest rates, even beyond just following the main policy rate. In core countries, it was mainly due to extra money, while in peripheral countries, it was more about buying specific bonds.