provisions tend to be more procyclical at larger and better capitalized banks. The procyclicality of loan loss provisions can …

We show that negative monetary policy rates induce systemic banks to reach-for-yield. For identification, we exploit … the 26 largest euro area banking groups. Banks with more customer deposits are negatively affected by negative rates, as … higher returns. Effects are stronger for less capitalized banks, private sector (financial and non-financial) securities and …

This paper investigates the relationship between bank funding costs and solvency for a large sample of euro area banks …. Among the deposit rates, the interest rates of the overnight deposits are the least sensitive. Banks' asset quality …, profitability and liquidity seem to play only a minor role in driving funding costs while the ECB monetary policy stance, sovereign …

partial equilibrium model of euro area funds and banks calibrated over the period between 2008 and 2017. An initial shock to … yields causes funds to sell assets to address investor redemptions, while both banks and funds sell assets to keep their … banks. However, funds' relative contribution has risen due to their increased assets under management and banks' lower …

How a historic drop in bank deposits shapes banks' loan supply? We exploit the effects of a large, and unexpected … includes all bank-firm lending relationships in all euro area countries. We find that banks experiencing large deposit outflows … is stronger for fixed rate and longer maturity loans, but not for riskier borrowers. The effect is mostly driven by banks …

This paper studies the impact of voluntary climate commitments by banks on their lending activity. We use … increased participation by the largest banks and banks with the most pre-existing exposure to high-polluting industries. Setting … priority for decarbonization. However, climate-aligned banks do not change their lending or loan pricing differentially …

This paper studies the bilateral drivers of mergers and acquisitions (M&As) between European banks. Two findings … document that banks use M&A as a device to leverage their expertise rather than to diversify. (i) Following the literature on … matrimonial matching by using a binary logit model, the paper examines how the structure of acquiring banks in terms of …

Can banks trade credit default swaps (CDSs) referenced on their current corporate clients at competitive prices, or are … banks penalized for potentially holding private information? To answer this question we merge CDS trades reported under the … that the same dealer offers to banks and to other investors. We find that banks lending to a corporation purchase CDSs on …

When the Covid-19 crisis struck, banks using internal-rating based (IRB) models quickly recognized the increase in risk … and reduced lending more than banks using a standardized approach. This effect is not driven by borrowers' quality or by … banks in countries with credit booms before the pandemic. The higher risk sensitivity of IRB models does not always result …

many banks have a MRP below one, indicating that those banks have little incentive to enhance their efficiency to increase …-conduct performance, and 'quiet life' hypotheses and to detect comparatively weak non-competitive banks. Our new measure of firm …