A Note of Caution on Quantifying Banks' Recapitalization Effects

Unconventional monetary policy measures like asset purchase programs aim to reduce certain securities' yield and alter financial institutions' investment behavior. These increase the market value of securities add their equity positions. We show that extent this recapitalization effect crucially depends on accounting valuation methods, country-level regulation, maturity structure. argue future research needs consider these factors when quantifying banks' effects consequent changes in lending decisions real sector.