Caterina MENDICINO is Principal Economist at the Monetary Policy Research Division of the DG-Research of the European Central Bank. Her major field of expertise is quantitative macroeconomics, with particular emphasis on macro-financial linkages and macro-prudential policy. 


She holds a Ph.D from the Stockholm School of Economics - Stockholm, Sweden - and a B.S. from the University of Rome III - Rome, Italy. Prior to joining the Monetary Policy Research Division, Caterina was ESCB/IO Economist in the Financial Research Division of the European Central Bank (2013-2015) and Economist in the Department of Economic Studies of the Bank of Portugal (2008-2013), and in the Department of Monetary and Financial Analysis of the Bank of Canada (2006-2008). 

 
 


WHAT'S NEW?



ROLLOVER RISK AND BANK LENDING BEHAVIOR: EVIDENCE FROM UNCONVENTIONAL CENTRAL BANK LIQUIDIY (with M. Jasova and D. Supera)  


How does a sudden extension of bank debt maturity affect bank lending in times of crisis? We use the provision of  long-term funding by the 2011 European Central Bank's (ECB)  very long-term refinancing operations (vLTRO) as a natural experiment to address this question. Our analysis employs a novel dataset that matches the ECB monetary policy and market operations data with the firm credit registry and banks' security holdings in Portugal.  We show that lengthening of bank debt maturity in crisis times has a positive and economically sizable impact on bank lending to the real economy. The effects are stronger on the supply of credit to smaller, younger, riskier firms and firms with shorter lending relationships. We also find that loan-level results translate to real and credit effects at the firm level. Finally, we discuss policy side-effects and show how the unrestricted  liquidity  provision  provided  incentives to banks to purchase more securities and partially substituted away from lending to the real economy.


BANK CAPITAL IN THE SHORT AND IN THE LONG RUN (with K. NikolovJ. Suarez and D. Supera),

How far should capital requirements be raised in order to ensure a strong and resilient banking system without imposing undue costs on the real economy?  Capital requirement increases make banks safer and are beneficial  in the long run but carry transition costs because their imposition reduces aggregate demand on impact.  Under accommodative monetary policy, increasing capital requirements are successful in addressing financial stability risks (by bringing the bank default probability close to zero) without imposing large transition costs on the economy. In contrast, when the policy rate hits the lower bound, monetary policy loses the ability to dampen the effects of the capital requirement increase on the real economy. The size of the risk that capital regulation has to address is key for the overall balance between the transition costs and the long-run benefits of changes in capital requirements. The benefits of higher capital requirements are larger and the costs are smaller when the probability of bank failure is high.



Accepted and Forthcomings:


 

OPTIMAL INFLATION WITH CORPORATE TAXATION AND FINANCIAL CONSTRAINTS (with D. FinocchiaroG. Lombardo and P.Weil), 2018,  JOURNAL OF MONETARY ECONOMICS.


OPTIMAL DYNAMIC CAPITAL REQUIREMENTS (with K. NikolovJ. Suarez and D. Supera), 2018, forthcoming JOURNAL OF MONEY CREDIT AND BANKING. ON LINE APPENDIX




Recent POLICY ARTICLES: 

 

Benefits and costs of liquidity regulation (with Marie HoerovaGlenn Schepens, Kalin Nikolov and Skander Van den Heuvel), Discussion Paper 2169, European Central Bank, 2018.


CAPITAL REGULATION: LESSONS FROM A MACROECONOMIC MODEL (with C. Mendicino and D. Supera) In: Achieving Financial Stability Challenges to Prudential Regulation, 2017 chapter 10, pages 121-131 World Schientific Publishing Co.


LOW INFLATION IN THE EURO AREA: CAUSES AND CONSEQUENCES, Occasional Paper 181, January 2017. 

Final report of the ESCB expert group studying the causes of Low Inflationhttps://www.ecb.europa.eu/pub/economic-research/research-networks/html/researcher_lift.en.html



















Subpages (1): ECB RESEARCH