Rodriguess, Paulo Manuel MarquesJúnior I, Luís João Matsinhe2026-04-132026-04-132026-01-272026-01-27http://hdl.handle.net/10362/202193Does ECB monetary policy affect Northern and Southern Europe differently depending on financial conditions? Using Hansen’s (1999) Panel Threshold Model with high-frequency identified shocks from Jarocinski and Karadi (2020) and the Composite Indicator of Systemic ´ Stress as threshold variable, I analyse quarterly data for twelve euro area members (2001Q1– 2019Q4). The central finding is that North-South transmission heterogeneity is state-dependent: during moderate-high financial stress, Southern GDP contracts 2.10 percentage points more than Northern GDP in response to identical monetary tightening. This asymmetry disappears in other regimes, suggesting the sovereign-bank nexus created regime-specific vulnerabilities with implications for common monetary policy.engMonetary policy transmissionPanel threshold modelFinancial stressCISSEuro AreaNorth-South heterogeneitymaster thesis204237270