Economic support during the COVID crisis. Quantitative easing and lending support schemes in the UK

Mahmoud Fatouh, Simone Giansante, Steven Ongena

Research output: Contribution to journalArticlepeer-review


We investigate how UK bank business lending responded to the simultaneous use of quantitative easing, leverage ratio capital requirements, and government COVID lending support schemes. We find no evidence that the Brexit wave increased lending to nonfinancial businesses, compared to the previous waves, except for QE-banks subject to the UK leverage ratio, suggesting that the ratio incentivised QE-banks to lend to businesses. The government schemes helped expand lending especially to SMEs post the COVID wave, indicating that complementing QE with other credit easing programmes can reinforce its impact on lending to the real economy. During COVID-stress, changes to the UK leverage ratio supported better market-making in securities markets, and additional QE liquidity boosted stronger repo market intermediation.

Original languageEnglish
Article number110138
JournalEconomics Letters
Early online date30 Oct 2021
Publication statusPublished - 31 Dec 2021


  • Bank lending
  • Monetary policy
  • Quantitative easing

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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