This paper analyzes the potential effect of a European Central Bank Digital Currency (CBDC) on banks' profitability. We … deposits. Using quantile regression, we estimate the conditional profit distribution of a representative bank. We then …

We develop a New Keynesian model where all payments between agents require bank deposits through deposits …-in-advance constraints, bank deposits are created through disbursement of bank loans, and banks face a convex lending cost. At the zero lower …

We develop a New Keynesian model where all payments between agents require bank deposits, bank deposits are created … through disbursement of bank loans, and banks face convex lending costs. At the zero lower bound on deposit rates (ZLBD …

account and taxing paper currency, the central bank can escape the zero bound, optimize its seignorage and eliminate … systematic profit shortfalls. By following a variant of Friedman's rule, the central bank can remove the market disruption of …

how the transmission depends on bank balance sheets, and how this changes once policy rates become negative. We review the …

-run supply of bank credit. As U.S. bond rates have fallen, the pass-through of monetary shocks to loan and deposit rates has … weakened while the spread on U.S. bank loans has risen. I build a model in which banks earn deposit and loan spreads, deposits … dampened at low rates, because deposit spreads act as a better hedge for bank equity against unexpected monetary shocks. In the …

Using administrative data on deposits and loans of every Norwegian with every Norwegian bank, we show that an existing … deposit account makes a household more likely to hold deposits at the same bank later despite better alternatives and more …