how the transmission depends on bank balance sheets, and how this changes once policy rates become negative. We review the … a zero lower bound. We summarize existing work on the impact of negative rates on banks' lending and securities …

We study the impact of increasingly negative central bank policy rates on banks' propensity to become undercapitalized …

Central Bank's policy-rate cuts in mid-2014. The pass-through of the rate cuts to banks' funding costs differs across the euro … provide a simple model of an augmented bank balance-sheet channel where in addition to costly external financing, there is … reduces their ability to lever up and weakens their lending standards. …

develops a simple analytical framework to study the impact of central bank policy-rate changes on banks' credit supply and risk …-taking incentives. Unobservable expost bank monitoring of loans creates an external-financing constraint, which determines bank leverage …. Unobservable, costly ex-ante screening of borrowers determines the level of bank risk-taking. More risk-taking tightens the …

We show that negative policy rates affect the supply of bank credit in a novel way. Banks are reluctant to pass on … low-deposit banks. As a consequence, the introduction of negative policy rates by the European Central Bank in mid-2014 … leads to more risk taking and less lending by euro-area banks with greater reliance on deposit funding. Our results suggest …

of banking sector concentration. Using a local projections framework with 2003-2023 country-level and bank-level data for …