bonds at the expense of lending to the real sector. To quantify the effect of this distortion, we build a standard RBC model … policy makes the steady state lending spread on loans to firms decline, stimulating investment and output. Also, it … stabilises the lending spread, leading to a lower volatility of investment and output. …

interest margin (NIM) and its components, retail lending and retail deposit rates. Using two proprietary bank-level data sets … market rates. As low profitability could hamper the ability of banks to expand lending, I also investigate the impact of the … NIM on new lending to the non-financial private sector. In general, the NIM is positively related to lending: When lending …