identification and data on all Swiss banks. First, we find that going negative can interrupt not only the pass-through from policy to … deposit rates, but also that to mortgage rates. Second, banks’ ability to offset negative deposit margins with increased … mortgage margins is shown to depend on market power. Third, imposing negative rates on all central bank reserves causes banks …

balance of three forces: interest rate pass-through, risk shifting, and leverage. When banks can adjust their capital …, the balance depends on the degree of bank capitalization: when facing a policy rate cut, well capitalized banks decrease … monitoring, while highly levered banks increase it. Further, the balance of these effects depends on the structure and …