Essays on Central Banking with Microdata

This dissertation brings together three self-contained essays that examine central banking themes related to monetary policy and financial stability. The common thread linking these essays is the use of microdata to address these questions. In addition to the three essays, the dissertation includes an introductory chapter.

The first essay examines the transmission of negative nominal interest rates in Finland. Using three complementary empirical approaches, it finds that cuts in the European Central Bank’s policy rate continue to pass through to mortgage rates even when the policy rate is negative, though the pass-through is weaker than in positive territory. Taken together, the results in this essay show that the effectiveness of monetary policy during the negative policy rate period was likely diminished but did not disappear.

The second essay studies whether central bank collateral policy influences credit pricing. Exploiting two unexpected expansions of the Bank of Finland’s collateral framework during the COVID-19 pandemic, it finds no significant effect of collateral eligibility on corporate loan interest rates. This contrasts with findings from other jurisdictions and suggests that institutional and economic context may shape the impact of collateral policies.

The third essay maps the ownership structure of Finland’s commercial real estate market using network analysis and comprehensive register data. It shows that government entities are the most important ultimate owners of commercial real estate firms and that government ownership is associated with lower spreads on the loans of these firms, consistent with perceived lower credit risk. These findings underscore the relevance of ownership structures for financial stability assessments and credit risk modeling.

Contact Ville Vuotilainen

Email: ville.voutilainen@helsinki.fi
LinkedIn: https://www.linkedin.com/in/ville-v-voutilainen/
Homepage: https://vvoutilainen.github.io/