Credit Supply and Demand in Unconventional Times

Do borrowers demand less credit from banks with weak balance sheets, following monetary policy shocks? To answer this, we use novel bank-specific survey data matched sheet information for euro area banks. We find that, a shock, bank strength influences as well supply. Bank resilience is important firms when selecting lender and it therefore vital to control identifying supply shocks. An application using shows that—even after fully controlling demand, borrower quality, strength—unconventional policies stimulate loan