In June 2014 the ECB became the first major central bank to lower one of its key policy rates to negative territory … by using individual bank data for the euro area to identify possible adjustments by banks triggered by the introduction … of negative interest rates through three channels: government bond holdings, bank lending, and wholesale funding. We find …

either assume that the effects of bank capital shocks are linear or ignore feedback effects and the impact on the … are typically associated with low bank margins and profitability, also lead to a larger decline in lending. De-risking is …