"With this book on the credit channel and the subprime mortgage crisis, Cristina Peicuti brings an important contribution to a better understanding, not only on the credit channel but also on the great financial crisis of 2007&2008-including its origins, the various policy responses on both sides of the Atlantic and across the international central banking community."-Jean-Claude Trichet, President of the European Central Bank (2004&2011) and Governor of the Bank of France (1993&2004) "An interesting retrospective on the subprime mortgage crisis, along with the implications for economic analysis. Useful for policy makers and academics alike."-Mark Gertler, Henry and Lucy Moses Professor of Economics at New York University and co-director of the Economic Fluctuations and Growth Program for the National Bureau of Economic Research This book explores the evolving role of the credit channel in contemporary macroeconomic policy and financial stability. In ten analytical chapters, Cristina Peicuti examines the dual function of the credit channel-as both a conduit for monetary policy transmission and a macroeconomic stabilizer-within the broader context of capitalist economies. Grounded in both theoretical inquiry and empirical investigation, the volume first establishes the conceptual foundations of the credit channel, drawing on influential contributions from leading economists. Peicuti systematically demonstrates the channel&s critical role in amplifying or mitigating the effects of monetary interventions, thereby shaping macroeconomic outcomes. A central focus of the book is the empirical analysis of the credit channel&s performance during the European subprime crisis.

Pairing case studies with policy evaluations, Peicuti assesses the measures adopted by EU Member States to preserve credit flows and support economic recovery. This analysis not only underscores the operational significance of the credit channel during periods of financial distress but also highlights its potential as a strategic policy instrument. The concluding chapters advocate for a structural rethinking of capitalism&s financial architecture, emphasizing the need for central banks to integrate the credit channel more explicitly into their policy frameworks. By doing so, the book argues that monetary authorities can foster conditions conducive to sustainable growth, price stability, and crisis prevention. The resulting book contextualizes modern economic governance and highlights the transformative potential of the credit channel. Cristina Peicutiis a professor and the scientific director of a research chair at the ESCP Business School in Paris, France. She is the author of several books, includingA Monetary and Economic History of France Since 1944 (2026) andThe European Economy in 100 Quotes(2024).