Marne; 5 Deutsche Bundesbank. This paper represents the authors ’ personal opinions and does not necessarily reflect the views of the institutions they are affiliated to. We would like to thank the members of the Eurosystem’s Monetary Transmission Network and the participants of the monetary economics workshop at the NBER Summer Institute 2001 for helpful discussions and feedback, and especially Ignazio Angeloni, Ignacio Hernando, Anil Kashyap, Claire Loupias, Benoit Mojon and Fred Ramb for their comments and This paper offers a comprehensive comparison of the structure of banking and financial markets in the euro area. Based on this, several hypotheses about the role of banks in monetary policy transmission are developed. Many of the predictions that have been proposed for the U.S. are deemed unlikely to apply in Europe. Testing these hypotheses we find that monetary policy does alter bank loan supply, with the effects most dependent on the liquidity of individual banks. Unlike in the US, the size of a bank does generally not explain its lending reaction. We also show that the standard publicly available database, BankScope, obscures the heterogeneity across banks. Indeed, for several types of questions BankScope data suggest very different answers than more complete data that reside at national central banks
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