ASB – 4902-0-MSc Dissertation 201617 January Students Impact of ECB Monetary Policy on bank lending behavior Mushfek-ul-alam Chowdhury ID: 500455068 Email: blp8bc@bangor.ac.uk Word Count: 3443 Abstract: The whole idea behind doing the research is to identify the existing loopholes of bank lending behavior due to the zero or low rate policy implemented by ECB. First, the researcher shall proceed by defining the problems of the bank lending behavior to from a complete new dimension with the following added variables to the research framework: asset size of the banks and return on assets. Next, the researcher shall conduct a detailed investigation to figure out the changes in the bank lending behavior with the following steps: 1. by selecting a base year that is 2006 before zero rate was implemented to compare with the current period under zero rate policy which is 2015. 2. Using a difference in difference method to observe the trend from year 2005 to 2015 in order to analyze the effects of the transformation of the ECB policy. Finally, the researcher shall be focusing on the main research question to find out whether there has been a significant change in the growth of non-performing loan ratios for the European banks in regard to the explanatory variables. The paper delivers it’s rational/objective of study at the beginning, provides a detailed specification of the empirical model in the methodology section. A brief literature review analyzes the perspectives of the “variables under investigation” based on a critical approach by adding the supporting or contrasting views and by synthesizing the findings of the differences among the opinions from different authors. 1