Tuo Yang

Abstract: Quantitative easing (QE) creates bank deposits when the Federal Reserve buys securities from non-banks, and this new money enters the banking system at a few primary dealers. I measure each bank's and county's exposure to these points of entry and show that it predicts deposit growth when the Fed is buying but not between programs. Controlling for asset-side QE exposure, deposit-channel exposure predicts additional lending and reaches far more banks. Within banks, lending rises more in exposed counties, favoring mortgages over small-business loans. Exposure also raises non-tradable employment and house prices in both QE episodes. Where money is created matters.

Abstract: The two dimensions of unconventional monetary policy, holding the short rate at the zero-lower bound (ZLB) and quantitative easing (QE), shifted deposit composition toward more interest-sensitive customers. The ZLB drew these customers by creating rate compression, which limited the benefit of searching for high-yielding liquidity sources. QE also drew rate-sensitive, large depositors from the Federal Reserve's purchases of bonds from non-banks. Once policy normalized, flow sensitivity and the deposit beta both increased with exposure to QE and the ZLB. We conclude that unconventional monetary policy made deposit retention costlier and riskier for banks.

Abstract: We study how monetary policy transmits to household consumption through the credit-supply decisions of FinTech consumer lenders, using a large-scale randomized credit-limit-increase experiment at a Chinese FinTech consumer credit lender covering over 1.2 million borrowers. Because the lender funds itself in the interbank market, monetary easing lowers its cost of capital and induces it to expand credit lines. The increase raises six-month consumption by about 46 percent, implying a marginal propensity to consume out of credit near 0.30, concentrated among the most credit-constrained borrowers. It also raises default by 0.22 percentage points, but this risk falls disproportionately on the least-constrained, youngest, and lowest-income borrowers. A welfare accounting implies positive net social welfare, driven by consumer surplus. FinTech consumer-finance companies are thus an important channel through which monetary policy transmits to household consumption.