Beyond Reserves: Why Some Banks Still Struggle to Lend Despite Ample Liquidity
Published on: Aug. 7, 2025, 10:19 a.m. | Source: Devdiscourse
Felix Corell’s ECB paper introduces the Marginal Propensity to Lend out of Deposits (MPLD) to show how U.S. banks respond to unexpected deposit inflows, revealing sharp contrasts before and after Quantitative Easing. The study finds that while liquidity constraints have eased post-QE, many banks remain sensitive to funding shocks, with implications for monetary policy and CBDC design.
