sow the seeds of a financial crisis. Banks respond to losses through higher spreads and rapid credit cutbacks, with …

balance sheets and sow the seeds of a financial crisis. Banks respond to losses through higher spreads and rapid credit …

. Banks lend funds deposited by households to a financial accelerator sector, and face penalties for maintaining insufficient … net worth. The loan contract specifies an unconditional lending rate, which implies that banks can make loan losses. Their …

-in-advance constraints, bank deposits are created through disbursement of bank loans, and banks face a convex lending cost. At the zero lower … bound on deposit rates (ZLBD), changes in policy rates affect activity through both real interest rates and banks’ net …

-in-advance constraints, bank deposits are created through disbursement of bank loans, and banks face a convex lending cost. At the zero lower … bound on deposit rates (ZLBD), changes in policy rates affect activity through both real interest rates and banks' net …