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We introduce a new comprehensive announcement-level database tracking the extraordinary fiscal, monetary, prudential, and other policies that countries adopted in response to Covid-19. The database provides detailed information, including sizes where available, for 28 granular policies adopted by 74 countries during 2020. About 5,500 policy measures were announced during this period. Importantly, the database is organized and presented in a format easy for researchers to use in empirical analyses. Announcements were highly correlated across the broad fiscal, monetary, and prudential categories and at more granular levels. Advanced economies (AEs) introduced larger fiscal measures than emerging and developing economies (EMDEs) and relied primarily on large unconventional monetary policies. Bank capital requirements were relaxed widely in both AEs and EMs, while relaxation of provisioning requirements was more common among EMs. Supervisory expectations and reporting requirements were widely relaxed.
India’s central bank frequently injects liquidity into banks or drains liquidity by altering the cash balances that banks must maintain with it. We analyze the lending responses within banks to these quantitative tools of monetary policy. We use internal data from over 125,000 branches of banks, and estimate empirical specifications that control for time-varying unobserved heterogeneity in banks and geographies. We show that the within-bank variation in lending is economically significant, and is explained by a rich suite of branch asset, liability, and organizational variables. Branches that are larger, make loans with smaller ticket size, are deposit rich, make shorter term loans, have fewer non-performing assets, and greater managerial capacity respond more to monetary policy. Responses are more sluggish in state-owned banks. Thus, besides the external financing frictions faced by banks, internal frictions within banks significantly explain the lending responses to funding shocks.
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