Nonstandard monetary policies and bank profitability: The case of Spain

Abstract

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The aim of this study is to examine the effects of nonstandard monetary policymeasures implemented by the Eurosystem on the Spanish banking sector prof-itability. To do this, a new database is built merging data from the SpanishBanking Industry Statistical Yearbook and from the Spanish Stock MarketCommission. Applying different econometric techniques to a panel of 54 Span-ish banks that covers the period 2001–2017 and controlling for bank-specificfactors and macroeconomic conditions, no discernible impact is found betweenthe Eurosystem's nonstandard monetary policy measures (ECB's total assets,excess reserves and the slope of the yield curve) and bank profitability mea-sured as return on assets, pre-tax operating income and interest margins. Thisresult is robust to different specifications and to different groups of banks.