Anne Duquerroy

Research Economist - Banque de France

Research Interests: Corporate Finance, Banking and Financial Intermediation, Political Economy

Contact Information

Banque de France - 31, rue Croix des petits Champs - 75001 Paris, FRANCE

Link to Professional Site

Curriculum Vitae

Working papers

Political Uncertainty and Corporate Investment: the Real Effects of Checks and Balances

This article explores the economic effects of checks and balances on corporate investment and employment. I use U.S. gubernatorial election results from 1978 to 2010 as a source of exogenous variation in whether the party controls both the executive and the legislative branch (unified government) or not (divided government), which determines its ability to implement its political agenda. I find that both public and private firms respond to the political cycle by reducing investment and hiring when government becomes unified. Investment drops by three to five percent in the year following an election resulting in unified government, while stock returns volatility is three percent higher. The findings support the hypothesis that moving from divided to unified government raises policy uncertainty by increasing the probability of future policy changes. Consistent with a real option channel, the effect is stronger for capital intensive firms with lower asset redeployability.

2019 MFA Outstanding Paper Award

Presentations: Maryland Political Economy working group, Banque de France Aghion seminar, 2018 AFSE , 2018 26th Finance Forum (Santander), MFA 2019 (Chicago), Royal Economic Society 2019 (Warwick).

Unconventional Monetary Policy and Bank Lending Relationships (with Christophe Cahn and William Mullins)

How do banks transmit long-term central bank liquidity injections to borrowers ? The ECB's 2011-12 Long-term Refinancing Operations (LTROs) affected lending to only some borrowers at each bank ; we exploit this unique feature to make four contributions . (i) We show the LTROs induced increased bank lending to firms in France, including to SMEs, an elusive policy objective. (ii) We uncover important heterogeneity: banks transmit LTRO liquidity differently to multi-bank than to firms with only one bank. This suggests that the literature's focus on multi-bank firms may have limited validity for the large population of single-bank firms. (iii) Differences in liquidity transmission map to archetypal lending types : single-bank firms receive relationship lending, and these firms invest and grow in response, while multi-bank firms receive transactions-style lending and do not increase their investment. (iv) While the majority of the effect flows to firms whose loans are policy-eligible, we identify a spillover (onto multi-bank firms only) that appears to be driven by bank competition for borrowers.

Latest version:

2017 Colorado Winter Finance Summit Best Paper Award

Presentations: R.H.Smith Maryland Finance Brownbag, 2017 WEAI Santiago, IFABS 2017 (Oxford), 25th Finance Forum (Universitat Pompeu Fabra), BdF-BdI Workshop on Corporate Finance, Banque de France seminar, FDIC 17th Bank Research Conference, ECB non-standard Monetary Policy Workshop, JFI-Olin Conference, Séminaire Fourgeaud (French Ministry of Finance), USC Finance seminar, 2017 Colorado Winter Finance Summit, MFA 2018, 11th Swiss Winter conference on Financial Intermediation, FIRS 2018, SFS Cavalcade 2018, WFA 2018, 2018 Wharton Conference on Liquidity and Financial Fragility, CEPII seminar, 2018 Oesterreichische Nationalbank seminar, 2019 Workshop Empirical Monetary Economics, 2019 Paris Eurofidai.

Bank Deposits and Redistributive Effects of Monetary Policy (with Adrien Matray and Farzad Saidi)

This paper documents that accommodative monetary policy can have contractionary effects on a large part of the real economy if it does not translate to lower funding cost for banks. For identification, we exploit the existence of regulated-deposit accounts offered to households in France the rate on which is not a direct function of the monetary-policy rate but, instead, guaranteed and set by the government. This introduces a funding-cost gap among deposit-funded banks. Using administrative credit-registry data, covering the universe of loans in France, we find that when regulated-deposit dependent banks face higher funding cost following monetary-policy changes, they contract their lending to large firms, but engage in greater risk taking by shielding small firms and entrepreneurs. We argue that this impairment of the transmission of monetary policy to deposit rates has redistributive effects by favoring more constrained borrowers especially in areas that are on weaker growth paths.
Presentations: Boston Fed, German Economic Association, ESMT Berlin, Bonn Universität Bonn Finance seminar, CU Boulder Finance in the cloud, EFA 2020

SMEs Financing and Local Bank Specialization (with Clément Mazet-Sonilhac, Jean-Stéphane Mésonnier and Daniel Paravisini )

We explore the role of the local industry specialization of bank branches as a new factor shaping the supply of credit to small firms. Using a very rich dataset that covers almost all bank-firm relationships in France, we compute a measure of the industrial specialization of bank branches. We first document that bank branch specialization is a common phenomenon, while different branches of the same bank generally exhibit different industrial specializations. We then investigate the effect of the specialization of a bank branch on the volume of credit granted to its clients. For identification, we exploit bank branch closings, followed by a transfer of the local client firms to another nearby branch of the same bank. Consistently with previous studies, we observe a significant drop in the supply of credit to small borrowers around the date of the closing. However, the effect of the closing almost doubles when the firm’s account is transferred from a branch, which was specialized in lending to its industry to a new, non-specialized, branch of the same bank.
Presentations: EFA 2020, Sciences Po, OFCE, Collège de France, ESCB workshop on "Financial stability, macroprudential regulation and microprudential supervision"

Work in progress

Interest Rate Uncertainty and Euro Area Firm Dynamics (with Klodiana Istrefi and Sarah Mouabbi)

We ask how interest-rate uncertainty (IRU) affects firm dynamics in the euro area. We exploit the term-structure of uncertainty about the future path of interest rates and explore its heterogeneous effects across countries and firms. We document that interest-rate uncertainty depresses firm-level activities; more so when firms are financially constrained. We find a negative effect of uncertainty about short-term rates irrespective of firm- and country-heterogeneity. The latter is stronger when firms are financially constrained and prior to the forward guidance period. Our results are therefore suggestive of a wide-spread effect of monetary policy uncertainty across countries and firms. Conversely, uncertainty about long-term rates only matters for periphery and constrained firms.

Policy publications

Choc de financement : quels effets sur l’investissement des grandes entreprises françaises ?

Bulletin de la Banque de France n°229, May 2020. (with Clément Mazet-Sonilhac)

Politique monétaire non conventionnelle : quel effet sur le financement des petites et moyennes entreprises ?

Banque de France, Rue de la Banque n°65, June 2018.

Credit Default Swaps and Financial Stability: Risks and Regulatory Issues

Financial Stability Review 13, The future of financial regulation, pp.75-78, September 2009. (with M.Gex and N.Gauthier)

Assessment and Outlook for Sovereign Wealth Funds

Focus Banque de France 1, November 2008.

Les Crédits aux Sociétés Non Financières en France: Evolutions Récentes

Bulletin de la Banque de France 174, pp.31-41, August 2008. (with J.Demuynck and P.Rousseaux)

Evolutions Récentes du Crédit aux Ménages en France

Bulletin de la Banque de France 169, pp.61-67, January 2008. (with J.Demuynck and T.Yon)